Q. Since I will leave 4000k for AOTC each year not asking for 529 reimbursement, do you think it is safe to say that I am not double dip in these benefits?
A. I can't tell. You wording on this and your last post are little unclear. It depends on the actual numbers. Yes, based on your 2023 numbers.
There are three things you can do with your Qualified educational expenses (QEE):
- Allocate then to scholarships (so that the scholarship remains tax free)
- Use them to claim an education credit (AOTC)
- Allocate them to the 529 distribution (1099-Q) so that it will not all be taxable
Note: it is not necessary to allocate expenses to loans or "your money". Depending on the student's other income, one technique is to have the student treat some of her scholarship as taxable to free up expenses for the AOTC or the 529 distribution. The first $13,850 of earned income (including scholarships) goes untaxed.
