Student not claimed dependent with 1098-T receives not credit using Turbotax 2024 software

[manchu73]

Hello

My son is full time student. He received 1098-T.  He is using Turbotax desktop version 2024 to file the tax. He is not claimed as dependent by me. When we go through the steps on software it says that he is not qualified for credit.
He got 1000$ credit in year 2023 with same set of data entry. He is second year student in 2024.

He owes zero dollar in tax for the year 2024.

Comparing both Turbo tax software for year 2023 and 2024 the only change is amount in box 1 of 1098-T ($19997). Year 2023 returns $1000 as calculated value. But Year 2024 returns Zero.

[Hal_Al · Accepted solution]

The most likely explanation is you did it wrong last year, not this year.

There's a new urban myth among college students that says they can get a $1000 from the government just for filing a tax form. For most of them, they simply aren't eligible. A full time unmarried student, under age 24, even if you don't qualify as a dependent, is only eligible for the refundable portion of the American Opportunity Credit if he supports himself by working. You cannot be supporting yourself on parental support, 529 plans or student loans & grants. It is usually best if the parent claims that credit.  If the parent's income is too high to qualify for the credit, it cannot be shifted to the student. 

The student cannot claim the (up to) $1000 refundable credit if he is, or can be, claimed as a dependent by someone else.

Reference: Line 7 instructions for form 8863.

https://www.irs.gov/instructions/i8863#en_US_2024_publink53002gd0e674

If the student actually has a tax liability, there is a provision to allow him to claim the non-refundable credit.  But, the fact that he got exactly $1000 indicates that was not your situation.