Q. it says your earned income should be more than half of your support, does it mean I am not qualified?
A. Yes.
"My parents paid my tution fees (as a gift to me)."
No. Your parents paid your tuition as part of supporting you.
"They are NOT going to claim me as dependent."
That's actually allowed, but, as you now know does not work.
While technically there is a provision that allows the student-dependent to claim a federal tuition credit, 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 worth up to $2500 (AOTC shifts to all non refundable)
