American Opportunity Credit

[taxesx4]

Yes, Most of his income came from self employment income (DoorDash - about $5400 in income).  So maybe that is why he's not getting the $2500 Amer Opp full credit to offset the taxes owed. 

Thank you!

[taxesx4]

I should have mentioned that most of his income came from self employment income (DoorDash - about $5400 in income).  So maybe that is why he's not getting the $2500 Amer Opp full credit to offset the taxes owed?

Thanks for your help.

[stantonporsche]

Do you have to file as an INDEPENDENT in order to claim the AOTC.  I made 12K last year. 

My parents make to much money, over 100K  a year and hence cannot get any sort of educational credit if the put me as dependent on their taxes.    

[Hal_Al]

Q. Do you have to file as an INDEPENDENT in order to claim the AOTC?

A. Simple answer: Yes. 

But, you're not allowed to file as independent, if you don't qualify as independent. That is, even if you parents don't claim you, you must still check the box on form 1040 that says they CAN claim you.

https://ttlc.intuit.com/community/dependents/help/when-do-i-have-to-answer-yes-to-being-claimed-as-a...

While technically there is a provision that allows your student-dependent to claim a federal tuition credit, from a practical matter it seldom works out.  A student, under age 24, is only eligible for the refundable portion of the American Opportunity Credit (AOTC) if he/she supports himself by working. She cannot be supporting herself on student loans & grants and 529 plans and parental support.  It is usually best if the parent claims that credit.  

If the student actually has a tax liability, there is a provision to allow him to claim a non-refundable tuition credit. But then the parent must forgo claiming the student as a dependent, and the $500 other dependent credit.  The student must still indicate that he can be claimed as a dependent, on his return. This is worth up to $2500 (AOTC shifts to all non refundable).  With only $12K of work income, you will not have a tax liability. 

$12K is unlikely to be be more than half you support.  The support value of the home, provided by the parent, is the fair market rental value of the home plus utilities & other expenses divided by the number of occupants.

The IRS has a worksheet that can be used to help with the support calculation. See: http://apps.irs.gov/app/vita/content/globalmedia/teacher/worksheet_for_determining_support_4012.pdf

Scholarships are ignored in the support calculation. 

[stantonporsche]

so american opportunity credit is a refundable credit up to $1000

if I make under the standard deduction of around 13.5K

if i have a tax liability then the american opportunity switch to nonrefundable to $2500

that is why it says maximum credit of $2500 ( applied only if tax liability)

last question: any educational credits on the state portion of taxes/(california)?