1098-T and AOTC

[floriatax]

Due to our high household income, we are not eligible to claim our daughter’s education credits. Therefore, we have decided NOT to claim her as a dependent on our tax return. This way, she can file her own return and claim the education credits herself, even though we paid for her tuition.

Our daughter earned only $900 (W-2) on 2025. We are using TurboTax Desktop to prepare her return.  You previously advised us not to claim an Education Credit if she doesn't qualify due to having no tax lability.  However, a friend mentioned she may be eligible to receive $1000 refund through AOTC.

Could you guide us on the following using TurboTax Desktop:

1) What steps should we take, and what does she need to input?

2) Does she need to enter her 1098-T forms in order to receive guidance on claiming the AOTC?

3) In addition to her University tuition, she took summer classes at our local community college and received a

    separate 1098-T from it.  Will that tuition also qualify for the credit?

4) How do we properly enter 1098-T from the community college tuition in TurboTax?

5) How should she enter both 1098-T forms in TurboTax? 

Thank you for your help and I look forward to hear from you. 

[MinhT1]

You can choose whether you claim your daughter as a dependent.

If she is under 24 and a full time student and she did not provide more than half of her own support for the tax year, you can claim him as a dependent and you only can claim her education credit by entering his form 1098-T on your tax return.

If you choose not to claim her, then you lose the Other dependent credit of $500 and you cannot claim his education credit from her form 1098-T.

On her own tax return, she is asked the question whether he paid more than half of his own support. If the answer is No, then she has to say that she can claimed as a dependent by someone else. 

If you have decided not to claim her, then as someone who can be claimed as a dependent but is not actually claimed, she can only claim the non-refundable part of the American Opportunity credit, but not the refundable part.

In your case, your daughter cannot claim the non-refundable part either because she has no tax liability.