Q. Are we able to claim her college expenses?
A. Yes. Even though the 1098-T is in her name, you enter it on your return, since she is your dependent.
Q. We also paid interest on her student loan that my husband co-signed. Can we claim that too?
A. Yes, because you paid it and had a legal obligation to pay it. Again, use her 1098-E to enter.
Q. She took some college classes while in high school. Does that cost count?
A. Maybe. You can only claim one credit. You may only be able to count the full time courses for The American Opportunity.
High school students are not usually eligible for the more generous American Opportunity Credit, unless they are officially enrolled as a degree candidate. From pub 970: "Example 3. During the 2015 fall semester, Larry was a high school student who took classes on a half-time basis at College X. Larry wasn't enrolled as part of a degree program at College X because College X only admits students to a degree program if they have a high school diploma or equivalent. Because Larry wasn't enrolled in a degree program at College X during 2015, Larry wasn't an eligible student for tax year 2015." Reference: https://www.irs.gov/publications/p970/ch02.html
You may be able to count both schools tuition for the lesser Lifetime Learning Credit. If these courses are provided by an eligible college, this cost qualifies for the Lifetime Learning Credit (LLC). The school must have policy of granting college credit for that course, already taken, if the student ever enrolls there. In other words, it is a requirement that the course be a college credit course, even if the student isn't currently a college student. It’s not that the student is post secondary, it’s that the course is post secondary. Books are not a qualifying expense, unless included in the course fee.
