Hi,
I’m seeking clarification on the Education Credit (AOTC/LLC) eligibility, dependency rules and filing requirements for my child for the 2025 tax year (filed in 2026). Additional background is provided below. Please advise. Thank you.
Child's Information:
- 22 years old, single
- Full‑time college student for the Spring 2025 term (Jan–May); graduated May 2025
- Began full‑time employment shortly after graduation. W‑2 wages exceed $15,750
- Lived with parents for the entire year. Parents provided full support for the entire year.
- Received Form 1098‑T and Form 1099‑Q in the child’s name.
- 1098‑T: Box 1 $8,250; Box 8 checked (at least half-time student); All other boxes blank
- 1099‑Q: Box 1 $5,250
- Total Tuition: $8,250 ($5,250 from 529 distribution and $3,000 parent OOP)
- Child is the beneficiary on the 529 plan. - Parent claimed four years of the AOTC for 2021 thru 2024
Questions:
- Dependency status: Based on the above, can the child still be claimed as a qualifying child dependent for 2025 on parent tax return, given that they were a full‑time student only for part of the year and then became employed full‑time after graduating?
- Child’s filing requirement: Is the child required to file their own 2025 return based on their W‑2 income level? If so, how does the answer to Question 1 affect the child’s return - specifically with respect to filing status, dependency status, standard deduction, and eligibility for credits/deductions/refunds?
- Education Credits / Reporting: Since the parents are no longer eligible for the AOTC (having already claimed it for four years), does the 1098‑T and 1099‑Q information need to be reported at all - either on the parents’ return, or on the child’s return (if the child must file)? Additionally, are there any remaining education related benefits (like LLC) that can be claimed?
Thank You!
