College Student Return Required?

[gabollin]

I am helping my granddaughter with her taxes for 2025.  She studied aboard the first 6 months of 2025 and then return and studied in the US for the last half of 2025.  Neither of her parents claim her as a dependent.  She had W-2 earnings of $1290 but did not have any federal or local taxes withheld so there is no refund to claim on this.  (She is a Nebraska resident).  She had less than $40 of interest and dividends.  She did receive a 2025 Substitute Form 1098-T that reflects $23,619.38 in Box 1 (payments for qualified tuition and related expenses) and $10,767.00 for Box 5 (for scholarships and grants).  She was a full-time student.  She also received Form 1095-B - Health Coverage.   She did receive a small refund in 2024 for taxes that were withheld per her W-2's.  Is there any need to file a return for 2025.  Since she had nothing withheld, I assume there are not educational credits that would be available to her.  Thanks so much for your help.

[MaryK4]

Your granddaughter would not be REQUIRED to file a federal or state tax return for 2025 based on the amounts you mention.  However, she MAY qualify for the refundable American Opportunity Tax Credit.  See What Is the American Opportunity Tax Credit? - TurboTax - Intuit for the requirements.

The American Opportunity Tax Credit (AOTC) is partially refundable, allowing taxpayers to receive up to $1,000 (40% of the $2,500 maximum credit) as a refund even if they owe no taxes. It applies to the first four years of higher education for eligible students, with the remaining 60% ($1,500) acting as a nonrefundable credit to reduce tax liability. 

What you need to know about education credits

Check if you need to file a tax return

Individual Income Tax FAQs