Tax deductability of 1098-t

[othersider2]

In 2018, my daughter's tuition was paid from her online account of the college which she attends.  There is a page on the college site that lets you pay the tuition online by providing a bank routing number and account number.  With my permission, the account used to withdraw the funds was from my bank.  She received a 1098-t from her community college.  She took the deduction on her taxes.  Was this allowable?

[xmasbaby0]

Is your daughter claimed as a dependent on your tax return?  Does she meet the criteria to be claimed as a dependent?  If she is your dependent then YOU get to use the education credit.  If she is not your dependent then you cannot use her 1098T on your tax return, even if you paid the tuition.  So which is it--is she a dependent--or not?

WHO CAN I CLAIM AS A DEPENDENT?

You can claim a child, relative, friend, fiance (etc.) as a dependent on your 2018 taxes as long as they meet the following requirements:

Qualifying child

• They are related to you.

• They aren't claimed as a dependent by someone else.

• They are a U.S. citizen, resident alien, national, or a Canadian or Mexican resident.

• They aren’t filing a joint return with their spouse.

• They are under the age of 19 (or 24 for full-time students).

◦ No age limit for permanently and totally disabled children.

• They live with you for more than half the year (exceptions apply).

Qualifying relative

• They don't have to be related to you (despite the name).

• They aren't claimed as a dependent by someone else.

• They are a U.S. citizen, resident alien, national, or a Canadian or Mexican resident.

• They aren’t filing a joint return with their spouse.

• They lived with you the entire year.

• They made less than $4,150 in 2018

• You provided more than half of their financial support. More info

[Hal_Al]

It doesn't matter which one of your paid her tuition.

The person that can claim the tuition credit is the person who claims the student's "exemption". If you daughter claims herself on her tax return, she can claim the tuition credit.  If you claim her as a dependent, you claim the tuition credit.

Furthermore, 

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 student, under age 24, is only eligible for the refundable portion of the American Opportunity Credit if he supports himself by working. You (she) cannot be supporting yourself on parental support, 529 plans or student loans & grants. You must have actually paid tuition, not had it paid by scholarships & grants.  It is usually best if the parent claims that credit.  You cannot claim a credit if you are, or can be, claimed as a dependent by someone else.

There is somersetting else you both need to be aware of: starting in 2018, a student, with earned income, usually gets the same amount of refund (or pays the same amount of tax) regardless of whether her parent claims her as a dependent. or not.