I'm helping a student determine if they provided more than one-half their support. Here is their situation:
1. Fulltime student in Fall 2024
2. Student loans totaling $2,722
3. Books, Supplies, and Computer necessary for registration and online coursework
4. Between the loans and necessary expenses the total caps at $4,000
5. Her parents are not claiming her as a dependent
She does have a job and I believe she earned around $6,000 last year, I don't have the total.
She lives at home and the only dedicate space is her bed as her room is location in the basement where the washer and dryer are location. All other space in the house is either shared by a total of 6 people or dedicated to the other members.
The parents only paid for her TEAS test which was a required expense. I gifted the computer and books.
She does not pay rent but I figured her FMV rent, if she did pay rent, would be $320/month based on her dedicated and shared space and the FMV of the house.
The parents pay the utilities and food and she is under their medical insurance. However she would pay for any medical expenses, clothing, and expenses related to herself.
As close as I can calculate one-half of her support is $3,000 considering it's a shared household, space, utlities, food.
Would she qualify for the refundable portion of the American Opportunity Credit? Non-Refundable doesn't matter since her tax liability will be 0.
Last question - If she does not pass the support test, would it make sense for her parents to claim her, then give her the refundable credit for tuition?
