We could claim her as a dependent in 2025 since we paid her spring tuition, room and board, if we pay for fall. She's been paying her own living expenses over the summer - and could pay for the fall tuition (after the scholarship) and rent out of the 529 fund. We're trying to figure out if she could claim the fall scholarship as income (perhaps both fall and spring), and the fall tuition that is being paid for by the (coincidentally) $4000 scholarship toward the AOTC. If she includes $8000 of scholarships in 2025 as income, then her AGI should be over $16000. If she pays her fall rent and groceries out of the 529, could she claim she is NOT eligible to be claimed as a dependent (since we only paid for spring expenses and she's been paying her own expenses all summer)? With a gross income of say $16,000, and the new standard deduction of $15750, would there be any benefit to her claiming the AOTC (would she get any refund beyond what has been withheld from her paycheck? I thought part of the AOTC was refundable?)? We cannot claim the AOTC for 2025, but if we pay her fall support we could claim the $500 dependent credit. Our income is too high to claim the AOTC.
Since we are hoping she will find a fulltime job after graduation and will be providing more than half her own support in 2026, we are counting on her claiming the AOTC for next spring (especially if she keeps the $4000/semester scholarship she's gotten since freshman year, and claims that as income and applies that to the qualified expenses for the AOTC, and pays the rest of the semester's expenses out of the 529). So 2025 is the last year (we hope) we can claim her as a dependent.
