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Education credits

rojo825 — Wed, 03 Mar 2021 21:44:04 GMT

Some facts: Daughter CAN be claimed as a dependent but parents will not be claiming her this year. Parents paid her college tuition. Parents cannot benefit from education credits due to high income limitations. Daughter has unearned income and will be paying tax at parents rate on her return. Is it correct that she could be eligible to take the education credit on her return? or is the fact that she qualifies (tho not claimed) as a dependent prevent her from doing so?

Re: Education credits

ColeenD3 — Wed, 03 Mar 2021 22:21:49 GMT

Not being claimed as a dependent, even though she is one, will not prevent her from claiming the education credit. However, she will only be eligible for the non-refundable portion, meaning it will go against her other income to reduce it.

Yes, she will need to file Form 8615 as well.

Re: Education credits

rojo825 — Wed, 03 Mar 2021 22:40:08 GMT

Thank you, however as nonrefundable credit it would reduce her tax liability not her "income" as you indicated, correct?

Re: Education credits

ColeenD3 — Wed, 03 Mar 2021 23:17:25 GMT

It would reduce the tax. It is initially entered on Line 3 Education credits from Form 8863 and flows to the 1040, Line 20 Amount from Schedule 3, line 7.