Sometimes adding a child to claim the American Opportunity Credit can decrease your refund if that child's own income is added to yours and it pushes you into a higher tax bracket.
If she is over 24, she is ineligible for the refundable portion of the tax credit.
A refundable tax credit reduces your tax liability dollar-for-dollar and can result in a refund of the remaining amount. Nonrefundable credits can only reduce taxes to zero,.
Adding a dependent for the American Opportunity Credit can decrease your refund if it triggers a conflict with other credits (like the Earned Income Tax Credit).
If she is a student under 19 (or under 24 if full-time) and has no income, adding them should not generally decrease your refund.
Also, make sure to go through the TurboTax screens regarding your daughter and make sure you have answered everything correctly. The following is required to be eligible for the credit:
- The student must be pursuing a degree or recognized credential.
- She must be enrolled at least half-time for at least one academic period.
- She must be within the first four years of post-secondary education.
- She cannot have a felony drug conviction.
- She cannot be claimed if listed as a dependent on another persons return
For tax year 2025, this credit begins to phase out for single taxpayers who have adjusted gross income between $80,000 and $90,000 and joint tax filers when adjusted gross income is between $160,000 and $180,000.
Click here for What Is the American Opportunity Tax Credit?
Please return to Community if you have any additional information or questions and we would be happy to help.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
