AOTC Education Credit help with R&B Allocation

Forum|Forum|3 months ago
April 4, 2026
1 reply
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@Hal_Al
Hello,

If possible could you please give your input if I have done this correctly to claim the AOTC?

I am trying to claim the AOTC credit for my student that is in their third year of college.
Our 1098 T info:
BOX 1: $51,369 .00
BOX 5: $52,425.00

Student at least half time: X
[The rest of the blanks on the form are empty.]

QEE (books): $23
Room & Board amounts paid for the 2025: $9,509
Scholarship Amount restricted to Tuition ONLY: $36,050

Can we allocate $5,035 of his scholarship money (the best I can tell this is the amount needed to receive the full AOTC credit) to his room & board and claim that for my students income? (They earned $5,977.60 over summer with research position at a college in PA (students lives and goes to college in MO the rest of year), they received a W2 for this PA job and that was their only income - so even with the $5,035 that's not enough for them to be *required* to file their taxes, correct? But I think we will to have a record on file and receive the small refund he would get from PA.)

This gives me the following:
Education Credit $1,500

Refundable American Opportunity Credit $1,000

For a total of $2,500

Does this look correct? Or do I need to do something differently?

Adding both amounts I get a total income of $11,012.60 for my student, which is below the standard deduction I believe. Also, I would like to file taxes for them to be able to receive the $367 they paid into PA. I believe we file for both states: PA & MO (no MO income or refund). Best I can tell they will receive $0 from both states, but $367 from Federal refund. Does this sound accurate or I have made a mistake somewhere or need to do something differently? This is the first year we have out of state (PA) income, so that is new for me.

Editing to add: Our student was refunded $1,056 in scholarship money, after all fees were paid. I am not sure if that needs to be added anywhere? Or if its already a "known" since its evident from the 1098T that they received more $ in scholarship than qualified tuition.

Thank you in advance.

Hal_Al

Level 15

Q. Can we allocate $5,035 of his scholarship money to his room & board and claim that for my students income?

A. Yes (I quick calculated $5033).

Q. Adding both amounts I get a total income of $11,012.60 for my student, which is below the standard deduction I believe that's not enough for them to be *required* to file their taxes, correct?

A. Correct, for federal. I'm not specifically familiar with PA & MO rules (other than PA has a ridiculously low filing requirement).

Q. This gives me the $2500 total and maximum American Opportunity Credit $1,000. Does this look correct?

A. Yes. Well done.

Q. Also, I would like to file taxes for them to be able to receive the $367 they paid into PA. I believe we file for both states: PA & MO (no MO income or refund). Best I can tell they will receive $0 from both states, but $367 from Federal refund. Does this sound accurate or I have made a mistake somewhere or need to do something differently?

A. Yes that is basically correct. Although you say $367 paid to (into?) PA then say $367 federal refund. You probably need to file both states. If you had no PA tax withheld, you will probably owe PA. MO will give you a credit, or maybe a partial credit, for any tax paid to PA.

Q. Our student was refunded $1,056 in scholarship money, after all fees were paid. I am not sure if that needs to be added anywhere?

A. No. It's already accounted for in the $5035 of scholarship he is reporting as income. You do not go by the amount of cash received. You go by the balancing of total scholarship and qualified expenses, which you have done.