Q. Where do I mark that my parents are not claiming me?
A. There is nowhere to directly say that on the form 1040. But, in the TurboTax (TT) interview, after answering that someone can claim you, you will be asked if somebody will claim you. Answer no. TT will then allow you to claim the tuition credit, even though form 1040 will be checked that you CAN be claimed as a dependent.
Technically there is a provision that allows a student-dependent to claim a federal tuition credit. But, from a practical matter it seldom works out. A student, under age 24, is only eligible for the refundable portion of the American Opportunity Credit (AOTC) if he/she supports himself by working. She cannot be supporting herself on student loans & grants and 529 plans and parental support. It is usually best if the parent claims that credit.
If the student actually has a tax liability, there is a provision to allow him to claim a non-refundable tuition credit. But then the parent must forgo claiming the student as a dependent, and the $500 other dependent credit. The student must still indicate that he can be claimed as a dependent, on his return. This is still worth up to $2500 (AOTC shifts to all non refundable)
