topic Claiming American Opportunity Tax Credit in Education

Claiming American Opportunity Tax Credit

JJB1468 — Fri, 21 Feb 2025 00:44:42 GMT

My daughter is a freshman in college and I claim her as a dependent. She recieved at 1098-T from her school. I tried to claim the AOTC on my taxes but Turbo Tax said I wasn't eligible. We used Turbo Tax for her taxes and it said she cannot claim it either? I dont understand why neither of us can claim that credit. Any ideas?

Re: Claiming American Opportunity Tax Credit

xmasbaby0 — Fri, 21 Feb 2025 00:51:38 GMT

Is your income too high? Or are you filing married filing separately?

AMERICAN OPPORTUNITY TAX CREDIT

https://ttlc.intuit.com/turbotax-support/en-us/help-article/tax-credits-deductions/eligible-take-american-opportunity-tax-credit/L8ZQFKvLe_US_en_US?uid=m6efibfz

https://www.irs.gov/help/ita/am-i-eligible-to-claim-an-education-credit

Re: Claiming American Opportunity Tax Credit

Hal_Al — Fri, 21 Feb 2025 01:48:50 GMT

The usual reason, you can't claim it is that your income is too high ($90,000 single $180,000 Married).

The student can't claim it because congress wrote the law to benefit parents.

A full time unmarried student, under age 24, even if you don't qualify as a dependent, is only eligible for the refundable portion of the American Opportunity Credit if he supports himself by working. You cannot be supporting yourself on parental support, 529 plans or student loans & grants. It is usually best if the parent claims that credit.

You cannot claim the (up to) $1000 refundable credit if you are, or can be, claimed as a dependent by someone else.

Reference: Line 7 instructions for form 8863.

https://www.irs.gov/instructions/i8863#en_US_2024_publink53002gd0e674

If the student actually has a tax liability, there is a provision to allow her to claim the non-refundable 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 she can be claimed as a dependent, on her return.