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Tuition credits

jadepeanut — Sun, 09 Feb 2025 12:50:33 GMT

I paid my son’s college tuition with my 529 account ; but he needs to file his own return due to his income from investment gains. Can we still claim the tuition credit? If yes, on whose return? Thanks!

Re: Tuition credits

MinhT1 — Sun, 09 Feb 2025 13:05:39 GMT

It depends.

Please note that you can't double-dip. Education expenses used to justify a 529 withdrawal can't be used to claim education credits.

If you claim your son as a dependent, you only can claim his education credit.

If he is not your dependent, he only can claim his education credit.

Please read this TurboTax article on Who Can I Claim as a Tax dependent?

The following is an extract of an IRS document:

Who can claim a dependent's education expenses. If a student is claimed as a dependent on another person's tax return, all qualified education expenses of the student are treated as having been paid by that person. Therefore, only that person can claim an education credit for the student. If a student is not claimed as a dependent on another person's tax return, only the student can claim a credit.

Re: Tuition credits

jadepeanut — Sun, 09 Feb 2025 13:30:31 GMT

Thanks, so it seems neither of us can claim the tuition credit as it was paid by 529 account. Am I correct?

Re: Tuition credits

MinhT1 — Sun, 09 Feb 2025 14:00:59 GMT

Yes, you are correct.

However, if it's more beneficial taxwise for you (or your son) to use all or part of the tuition to claim an education credit (American Opportunity tax credit or Lifetime learning credit) and pay taxes on the corresponding earnings portion of the 529 withdrawal, you can use the more beneficial option. When the tuition is used to claim education credits, there is no penalty (only taxes) on the 529 earnings not used for education expenses.