My reply at the other thread was incorrect and has been edited. The LLC is $2000 max per tax return, unlike the AOC which is $2500 max per student.
While technically there is a provision that allows your student-dependent to claim a federal tuition credit, on his own tax return, from a practical matter it seldom works out. A full time 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) or $2000 if the student is only eligible for the Lifetime Learning Credit (LLC).
