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Level 1
posted Mar 15, 2020 4:07:36 PM

Why do I not qualify for American opportunity tax credit if i am a full-time student. But I do qualify if I mark no to full time student?

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1 Best answer
Level 15
Apr 12, 2020 5:04:05 PM

I hadn't noticed that before; apparently you don't get the 2nd support question if you answer no to the first support question. That makes sense, if the answer to the first question is no; the answer to the 2nd question has to be no also. But you should have gotten a question about living parents.

 

From Pub 970:

A student does not qualify for the (up to) $1,000 refundable portion of the American Opportunity Credit (AOC) if items 1, 2, and 3 below apply to him. 
1. He was:
.....a. Under age 18 at the end of 2019, or 
......b. Age 18 at the end of 2019 and his earned income was less than one-half of his support, or 
......c. A full-time student over age 18 and under age 24 at the end of 2019 and his earned income was less than one-half of his support .
2. At least one of his parents was alive at the end of 2019 (the "orphan question")
3. He is not filing a joint return with his spouse for 2019.

 

So, yes a part time student can get the credit, if he doesn't qualify as a dependent, but a full time student can't, As stupid as that sounds, it's the law. TT is doing it correctly, when you indicate full time student, under 24, not supporting yourself: no refundable AOC 

8 Replies
Employee Tax Expert
Mar 15, 2020 4:31:12 PM

It depends.

 

If you are claimed as a dependent on someone else's return, they would be entitled to the education credit.

 

If you have already claimed the education credit for four years, you can no longer claim the American Opportunity Credit as it is limited to four years.

 

I recommend you go through you 1098-T information input screens again.  As you go through the screens, you will see a screen similar to the following screen. 

 

This screen outlines which credits or deductions you may or not qualify for.  An explanation is provided as to why you may not qualify for any particular credit.

 

 

 

Level 1
Apr 11, 2020 6:33:32 PM

Based on review of the qualification requirements for the American Opportunity Credit, I would qualify.  I am independent, this my first year for the credit.

 

When I say respond to the question of "full time student" as NO, I qualify but if I select YES, I do not qualify.  

Expert Alumni
Apr 11, 2020 6:44:39 PM

Shouldn't be that way, are you sure the program is not telling you about the Saver's Credit

You can't get that credit if you are a full-time student.

Level 15
Apr 11, 2020 7:07:16 PM

TurboTax is doing it correctly.  It's a quirk in the law. Essentially the law was written to help parents, not students.

 

 A full time unmarried student, under age 24, 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. You usually must have actually paid tuition, not had it paid by scholarships & grants.  It is usually best if the parent claims that credit. 

Level 1
Apr 12, 2020 10:30:03 AM

I answered the question that I did NOT pay for more than 1/2 my living expenses for both scenarios of full time student and not a full time student.  

Everything remains unchanged with the only thing I change is the Full Time Student - YES = no american opportunity credit and if I answer Full Time Student - NO = I qualify for american opportunity credit.

The american opportunity credit requirements are only for part time student.

 

I don't understand why I would not qualify as a full time student.

Level 15
Apr 12, 2020 11:16:02 AM

@scarstens00 

There are two support questions in the personal info section.  You only get the 2nd question when you answer full time student

The first question asks if you provided more than half your support. The 2nd question asks if you provided more than half your support with earned income.

Level 1
Apr 12, 2020 1:46:18 PM

I get the same support question if I answer Yes or No to the full student question.

 

I am answering everything the same except the full time student question.

Yes = do not qualify american opportunity credit

No = qualify for american opportunity credit

Level 15
Apr 12, 2020 5:04:05 PM

I hadn't noticed that before; apparently you don't get the 2nd support question if you answer no to the first support question. That makes sense, if the answer to the first question is no; the answer to the 2nd question has to be no also. But you should have gotten a question about living parents.

 

From Pub 970:

A student does not qualify for the (up to) $1,000 refundable portion of the American Opportunity Credit (AOC) if items 1, 2, and 3 below apply to him. 
1. He was:
.....a. Under age 18 at the end of 2019, or 
......b. Age 18 at the end of 2019 and his earned income was less than one-half of his support, or 
......c. A full-time student over age 18 and under age 24 at the end of 2019 and his earned income was less than one-half of his support .
2. At least one of his parents was alive at the end of 2019 (the "orphan question")
3. He is not filing a joint return with his spouse for 2019.

 

So, yes a part time student can get the credit, if he doesn't qualify as a dependent, but a full time student can't, As stupid as that sounds, it's the law. TT is doing it correctly, when you indicate full time student, under 24, not supporting yourself: no refundable AOC