Thank you very much for your reply, this was very helpful. I just want to clarify a few things to make sure I understand everything. Yes, you’re correct, I’m trying to figure out if she qualifies for AOTC and her dependency status. So just to clarify all the details - she’s under 24, FT student, and had earned income in 2024. She lives on campus and during the summer she worked at a sleep-away camp so she spent at most 2-3 weeks at home during 2024. She paid for over 50% of her college expenses (tuition/room and board) in 2024 (spring and fall semesters, some of these funds went towards spring ‘25 semester but they were paid in 2024), the rest was paid from the 529 plan. Her parents paid for her health insurance, their house is paid off, there’s no mortgage. She also had some other non-significant expenses (food/clothing) for which she paid herself. She obviously paid taxes in 2024 and will file her tax return.
If I understand the rules correctly, based on the above she probably CAN be claimed as a dependent by her parents (mostly because of the “house” which is her permanent residence even though she barely lived there. Otherwise, even with health insurance paid for by parents, the amount she paid with her earned income would still be higher than 1/2 of her cost of living which is college expenses+health insurance+additional expenses). So then she should indicate on her return that she can be claimed as a dependent but her parents should not actually do so on their return, correct ?
And lastly, what about the question regarding her self-support status on her return ?
Thanks again !
