College Student

[Oriondiesel]

I have a college student starting this year.  Tuition is covered by scholarships/post 911 GI Bill.  Books, other school fees will be out of pocket.  Do I still need to file for education credits when I file 2021 taxes?  Please advise, thanks!

[NateTheGrEAt]

Hi Oriondiesel,

In the scenario you describe, you could certainly file for an education credit. However, be aware that the amount of the credit would be computed based on your actual out of pocket expenses. Expenses paid by a grant such as the GI Bill do not count towards the amount eligible for the education credit. There is no minimum amount of qualified expenses required to claim the credit; you just receive less credit if you have lower expenses.

One item to be aware of is that the American Opportunity Credit is only available for 4 tax years per student, total. So if this student expects to take more than 4 years to complete their bachelors and you think you might have higher qualified expenses in a future year, that might be a reason not to claim the AOC this year. You could take the Lifetime Learning Credit instead if you wanted to explore that option.

I hope this information is helpful!

[Oriondiesel]

Thank you for that advice.  I appreciate your time to take on my inquiry.