Student Information Worksheet Part VI Item 17

[RandyK]

If AOC is only credit available for student (In student's taxes), I assume the Student Information Worksheet Part VI Item 17 amount only applies for the amount of credit being received on the parent's taxes.

[RandyK]

I'm not sure I worded this correct. The student utilized an ESA to pay for the educational expenses. It is my understanding that the student therefore can NOT claim any AOC, but the parent's can.  Therefore, I assume in this case, item 17 applies only to the amount of AOC claimed by the parents.

[KrisD15 · Accepted solution]

If the student is your dependent, and the credit relating to the student's education expenses is applicable to be claimed, the Taxpayer claiming the student claims that credit. 

Expenses paid with a 529 Education Savings Account need to be reduced before the credit is claimed OR the distribution must be claimed as taxable income. 

If a distribution is taxable, it is reported as taxable income by the person that made the distribution, Owner or Beneficiary. The 1099-Q will also be issued to that person. 

In TurboTax, the person claiming the student can enter the 1099-Q and 1098-T after which the program should indicate who claims the credit and who claims taxable income.

The American Opportunity Tax Credit should never be available on the student's return if the student is claimed as a dependent on another person's return, such as a parent. 

If the student is not a dependent, only the student may claim the credit.

IRS Pub 970