I completed my daughter's 2020 Tax Returns entering her college 1098-T information. She did not qualify as my dependent and had only taken 2 classes in the 2020 Spring semester. After filing her 2020 return, we realized she had only gotten $9, of the possible $2,500. So essentially, we wasted 1 of her 4 years of Amer. Opp. Credit. She is taking longer than 4 years to get her bachelor degree and had only gotten the American Opportunity Credit on the 2019 Tax Return we filed with her as our dependent. 2019 the credit received was the full amount.
In looking at her 2021 returns, we think she should wait until 2022 when she will have more college expenses (in 2021 she was only in school in the Fall) because she's in school now for Spring full-time and will be in school in the Fall part-time. Her full-time status now will allow her to be claimed as our dependent in 2022. We expect the Amer. Opp. Credit to be the full amount (or at least more than this year's). So 2022 would be her 3rd year getting the credit assuming she doesn't take it this year for 2021 (she'd only get about $500 of $2,500). She's not planning to be a full-time student Spring or Fall of 2023, so she won't qualify as our dependent that year but she'll have more college expenses in 2023 than she did in 2021. So our thought is by skipping the claim for 2021, and leaving it to claim her 4th year's credit in 2023,that is a better option in the long run. Does that make sense (assuming everything I outlined above plays out, of course)? If so, do we just NOT enter her 1098-T on her 2021 tax return to skip this year's credit?
Thank you!
