I'm thinking about not claim my 19-year-old college student because our combined income is just over the Stimulus Phase-out amount and above the American opportunity tax credit cut. So it appears that if I keep her as a dependent, then neither parents and she does not get a stimulus check. We also don't get any of the American opportunity tax credit. My thinking is don't claim her as a dependent (of course I have to pay more) but she may qualify for stimulus money and Amer. Opp. Tax credit. Any thoughts on why or why not to do this? Thanks!
That is a reasonable approach. Be sure that your student checks the box saying that someone else CAN claim her. Also realize that the student can only get the non refundable portion of the education credit. So if they have no tax liability the credit is irrelevant. Also realize that she cannot get the stimulus since she can be claimed as a dependent even though you don’t actually claim her.
Thanks for your reply. Interesting... I'm glad that I asked the question.
After reading your reply... so if she didn't work (full time student so no W2/no taxes paid) then she would not get any of the American opp credit?
I also didn't realize that she cannot get the stimulus if she can be claimed as a dependent. I just assumed that if I didn't claim her then she would be eligible.
If she doesn't get any Amer. Opp Credit money or stimulus money, then it doesn't appear to make sense to do this.