Who should claim credit for Son's college tuition fee?

[rjm8]

I have a son in college and his tuition is 14K plus 14K in lodging expense. He earned 2K from summer job and 10K from investment. We used 10K from his investment to paid for lodging and rest of lodging and tuition was paid by us.

Our AGI is 300K plus. Should we enter the college expense (including 1098-T) on our tax filing or on our sons?

Note: We have mark our son as dependent on our return and marked someone else claim as dependent on my sons.

[MinhT1]

As your dependent, your son cannot claim his education credits.

Your son has to file his own tax return to report his income (wages and investment income).

You only can claim your son's education credits, but your MAGI is too high and you cannot claim them. The income limits are $180,000 for the AOTC and $160,000 for the Lifetime Learning credit.

So there is no need to enter your son's 1098-T on his or your tax return.

[rjm8]

If I do not claim him as dependent. Can he then claim the credit?

Since he had 2K income from job and 10K investment income, I was thinking of using AOTC for any tax charged.

[Bsch4477 · Accepted solution]

He can claim the non refundable portion of the American Opportunity Credit but must check the box saying someone else CAN claim him. As an aside, his investment income will be subject to Kiddie Tax so some will be taxed at your tax rate. 

[Hal_Al]

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 full time 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)

[rjm8]

Thank you all for quick responses, and sharing knowledge.