mtpugh67
Returning Member

Claiming the American Opportunity Tax Credit without paying tuition

My wife and I are filing jointly. Her parents paid for her education expenses, but are not claiming her as a dependent. She received a 1098-T form with a mixture of scholarships, loans, and credit card payments - none of which we paid for or were responsible for. TurboTax is telling me to claim the American Opportunity Tax Credit. My wife appears to qualify for it in every way - but I don't understand how our tax return can improve for something we had nothing to do with. 

 

Can we claim the American Opportunity Tax Credit if we didn't pay for education expenses?

Hal_Al
Level 15

Education

Yes.  You are allowed to claim payments made by her parents in claiming the credit.  It's an exception, in the tax code, to the general rule that you must pay it  to deduct it.