Edited 5:41 1/17/18
Funds paid with student loans count as if you paid them yourself. If you are not a dependent, you may claim your own education expenses. However, if you are claimed as a dependent, your parents get the credit if available.
Whether or not you can get a refund will not be determined until you do your tax return and the credit is used against your tax. The American Opportunity Credit, if you qualify, does provide a refundable credit.
The American
opportunity tax credit (AOTC) is a credit for qualified education expenses paid
for an eligible student for the first four years of higher education. You can
get a maximum annual credit of $2,500 per eligible student. If the credit
brings the amount of tax you owe to zero, you can have 40 percent of any
remaining amount of the credit (up to $1,000) refunded to you.
The amount of
the credit is 100 percent of the first $2,000 of qualified education expenses
you paid for each eligible student and 25 percent of the next $2,000 of
qualified education expenses you paid for that student. But, if the credit pays
your tax down to zero, you can have 40 percent of the remaining amount of the
credit (up to $1,000) refunded to you.
Qualified
education expenses must be paid by:
- You or your spouse if you
file a joint return,
- A student you claim as a
dependent on your return, or
- A third party including relatives or
friends.
- Note.
Qualified education expenses paid by a dependent for whom you claim
an exemption, or by a third party for that dependent, are considered paid
by you.
(The you in the last statement is your parents, if this applies to them.)
