Am I eligible for AOTC and Recovery Rebate Credit

[vishalg64]

Hi all,

I am currently a student at a 4-year institution and just found out about the AOTC Tax Credit. I just have a couple of questions regarding it:

1. As the 2021 tax returns expire this year, would you recommend filing them this year, and if so, is the Deluxe Plan enough to do so?

2. Since I did not claim the credit for any of the years, am I able to claim it for 2021, 2022, 2023 and 2024 this year, or am I only able to do 1 by 1 e.g. this year I will file for 2021, next year for 2022 etc.

3. My final question is in regard to the Recovery Rebate for 2021. I am an American Citizen who did not file my taxes in 2021 as I was not earning income, however (I believe I am ineligible) I was wondering if I could also attempt to file for this using the Deluxe 2021 Turbotax Product.

Any help would be greatly appreciated!

[xmasbaby0]

If someone else could claim you as a dependent in 2021, then you were not eligible then for the stimulus money and are not eligible now for the recovery rebate credit.   That credit is based on your 2021 situation.  You state that you were not earning any income in 2021.   Were you a student---being supported by someone else--such as your parents?

There have been no federal stimulus checks since 2021----so there are no recovery rebate credits to put on returns for 2022, 2023, or 2024.

And....you seem to be asking about the American Opportunity Tax Credit too.  If you were someone else's dependent, then the person (or parents) who could claim you were the ones who could use the AOTC on their tax return.     If, in fact, you were eligible for the AOTC yourself, then you would have to file returns for each tax year in which you are trying to get it.   

To quote another TurboTax Champ, @Hal_Al 

There's a new urban myth among college students that says they can get a $1000 from the government just for filing a tax form. For most of them, they simply aren't eligible. 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

[Opus 17]

You are eligible for 4 years in total, but also only for the first 4 years of full-time undergraduate study (the first 4 years of a traditional college schedule).  So if you were a student starting in 2021, you claim the credit on your tax returns for 2021, 2022, 2023, and 2024.

However, the credit is only available if you are not claimed as a dependent by anyone else, and only if you have enough income to owe taxes.  The credit is not free money and can't be refunded to you if you don't owe taxes.  (A portion of the credit can be paid even if you have no income, but only if you are over age 23 or you are younger than 23 but both parents are deceased.)  If you are a dependent of your parents, they probably claimed the credit on your behalf since they would be legally entitled to it. 

You can prepare an original 2021 return to see if you qualify (or an amended return if you already filed) but you may need to pay for Turbotax for the 2021 year in order to calculate if you are actually eligible.  There is a 60 day money back guarantee if you buy the program and don;t use it because you don;t qualify, but you still have to buy the program up front to see if you qualify.  

[Opus 17]

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@xmasbaby0 wrote:

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"If someone else could claim you as a dependent in 2021, then you were not eligible then for the stimulus money and are not eligible now for the recovery rebate credit."

This is not entirely correct.  There is a situation where a child can claim the AOTC even if they are a dependent.  (This is an exception to the usual rules.). There are two questions, "Can you be claimed as a dependent by someone else" and "Will the person who could claim you, actually claim you?"

If a student-child can be claimed as a dependent, but is not claimed, then the student-child can claim the AOTC on their own tax return.  This is usually only helpful when the parent's income is so high that they are phased out of the AOTC.  The child can sometimes get a partial credit which is better than no credit. 

Of course, in this case, whether or not @vishalg64  is eligible, depends on their income, their dependent status, and whether their parents did or could have claimed them as a dependent.  And if they had no income and did not file, the AOTC won't give them free money except in very limited circumstances.  

[AmeliesUncle]

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@Opus 17 wrote:

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@xmasbaby0 wrote:

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"If someone else could claim you as a dependent in 2021, then you were not eligible then for the stimulus money and are not eligible now for the recovery rebate credit."

This is not entirely correct.  There is a situation where a child can claim the AOTC

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Xmasbaby said "Recovery Rebate" ($1400 on the tax return if they did not receive the $1400 EIP), not AOTC.  🙂

[Opus 17]

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@AmeliesUncle wrote:

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@Opus 17 wrote:

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@xmasbaby0 wrote:

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"If someone else could claim you as a dependent in 2021, then you were not eligible then for the stimulus money and are not eligible now for the recovery rebate credit."

This is not entirely correct.  There is a situation where a child can claim the AOTC

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Xmasbaby said "Recovery Rebate" ($1400 on the tax return if they did not receive the $1400 EIP), not AOTC.  🙂

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In that case, then it is the statement that "If you were someone else's dependent, then the person (or parents) who could claim you were the ones who could use the AOTC on their tax return" that should be qualified to state that, in some cases, the student can claim the AOTC even if they are a dependent.