Earned income does not provide over 50% of my support BUT other income does so I am not claimed on my parents return. (Support is approx 25% earned income, 25% 529 distribution, 25% from personal savings and 25% K1 trust income). I am under 24 and file my own return.
Why do your parents not claim you as a dependent on their tax return? They absolutely qualify to do so. The support requirement is on the student, and *only* the student. There is absolutely no requirement what-so-ever for the parents to provide any support. Not one penny. My point is, you *QUALIFY* to be claimed as a dependent on your parent's tax return. Weather they actually claim you or not is irrelevant. Either way, you the student are still required by law to select the option for "I can be claimed on someone else's tax return". It does not matter if they actually claim you or not.
Is this correct?
The above is concerning the AOTC. Yes it's correct provided your parents do not actually claim you as a dependent. But remember, They *do* qualify to claim you. THerefore you *MUST* select the option to indicate that you can be claimed as a dependent on someone else's tax return. Again, it does not matter if they "actually" claim you or not. It's a fact that they "QUALIFY* to claim you.
Now even after selecting that option, when working through the AOTC part you will be asked if your parents "QUALIFY" and you will say yes. Then you'll be asked if your parents "acutally claimed you" and you will say NO. Then if you have sufficient "earned" and "taxable" income to apply to the non-refundable portion of the AOTC that you may qualify for (assuming you will qualify) that will reduce the tax liability on *your* earned income.
It will not reduce the tax liability on any excess scholarships, grants or 529 funds that were received by you and not used for education.
