If your son is under 24 and a full time student and he did not provide more than half of his own support for the tax year, you can claim him as a dependent. If you do not claim him, then you lose the Other dependent credit of $500 and you cannot claim his education credit from his form 1098-T.
As for your son, on his own tax return, he is asked the question whether he paid more than half of his living expenses with earned income. If the answer is No, then he must say that he can be claimed as a dependent by someone else. And he will not be eligible for the first two stimulus payments.
If someone can claim him as a dependent but does not actually claim him, he can claim the non-refundable part of the American Opportunity credit, but not the refundable part.
@jwgeary
@NCperson - Thank you for your clarification.
Edited 04/01/2021 | 2:52 PM PST
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