Student tuition credits and tax return

[newton212]

My son is 19 years old and in First Year student of University. He has not worked this year and doesn't have any income to declare. Does he need to file income tax? How can I claim his tuition and book expenses? Kindly advise. 

Thank you

[CatinaT1]

If he had no income in 2019, he does not need to file a return.  

You, as his parent, claim him as a dependent and claim any tuition credit he is eligible for.  You should have a 1098T from the school that you will enter as part of your return.

To be eligible for AOTC, the student must:

• Be pursuing a degree or other recognized education credential
• Be enrolled at least half time for at least one academic period* beginning in the tax year
• Not have finished the first four years of higher education at the beginning of the tax year
• Not have claimed the AOTC or the former Hope credit for more than four tax years
• Not have a felony drug conviction at the end of the tax year

*Academic Period can be semesters, trimesters, quarters or any other period of study such as a summer school session. The schools determine the academic periods. For schools that use clock or credit hours and do not have academic terms, the payment period may be treated as an academic period.

More information can be found here:

Education Credits

American Opportunity Credit

[Hal_Al]

He does not need to file a tax return, unless his scholarships exceeded his tuition, fees and books by more than $12,200.

Since he is your dependent, you can claim the tuition credit for his schooling.  He should have received a form 1098-T from the school.  

In TurboTax (TT), enter at:

Federal Taxes Tab (Personal for H&B version)

Deductions & Credits

-Scroll down to:

--Education

  --Education Expenses

If his scholarships, in box 5, of the 1098-T are not at least $4000 less than the amount in box 1, read on for how to handle that. 

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There is a tax “loophole” available. The student reports all his scholarship, up to the amount needed to claim the American opportunity credit, as income on his return. That way, the parents  (or himself, if he is not a dependent) can claim the tuition credit on their return. They can do this because that much tuition was no longer paid by "tax free" scholarship.  You cannot do this if the school’s billing statement specifically shows the scholarships being applied to tuition or if the conditions of the grant are that it be used to pay for qualified expenses.

Using an example: Student has $10,000 in box 5 of the 1098-T and $8000 in box 1. At first glance he/she has $2000 of taxable income and nobody can claim the American opportunity credit. But if she reports $6000 as income on her return, the parents can claim $4000 of qualified expenses on their return.