Dependent over 25 years of age

[inpatel.austin]

I have a 26 year old daughter going to med. school.  I am supporting her 100% including tuition, apartment rent and living expenses.  She has nominal income from interest and capital gains (less than $2000).  We are in Texas (no state tax).  I am filing married jointly.

Last year, I tried putting her on my tax return as dependent and my tax liability did not change so i did not claim her as dependent (hoping that her filing with very small income, she may be eligible for scholarships) and she filed on her own.  This year, I am finding some material on LLC (life long learning credit).   My income does not allow me to get child credit at all.  My question is whether i should claim her as dependent?  Any way, I can use tuition paid for any tax credit or even deduction for income?  If there is no change in my tax liability, should i just let her file on her own?  Where do i even use the tax form she receives from school for tuition paid? 

[NCperson]

@inpatel.austin 

your daugher is still your dependent since you are providing more than 50% of her support and she earns less than $5200.  You can prove it to yourself at this website.  Depending on your income, you would be eligible for a $500 tax credit ("other dependent credit"). 

https://www.irs.gov/help/ita/whom-may-i-claim-as-a-dependent

Since she CAN be claimed as a dependent (whether you claim her or not is immateral), she is not eligible for the Lifetime learning credit. 

On form 1098-T: 

if  the expenses in Box 1 exceed the scholarship in box 5, that would be the basis of any educational tax credits.   in this case, the form does nothing as I suspect your income exceeds $180,000 from your statement.  Put it in a draw! 

If box 5 exceeds Box 1, that net is taxable to your daughter. 

[xmasbaby0]

  "My income does not allow me to get child credit at all."

You lose the child tax credit when a child turns 17--no exceptions.    

At the age of 26, if her income (excluding any Social Security) is less than $5200, she can be claimed as a qualified relative dependent for the non-refundable $500 credit for other dependents.   A dependent cannot get education credit on their own tax return.

The rule is if a person CAN be claimed as a dependent they must say on their own tax return that they can be claimed by someone else--regardless of whether they are claimed.  There is no "letting" her say she cannot be claimed if she made less than $5200.

https://www.irs.gov/help/ita/am-i-eligible-to-claim-an-education-credit

LIFETIME LEARNING CREDIT

https://ttlc.intuit.com/turbotax-support/en-us/help-article/tax-credits-deductions/expenses-qualify-...

Your own eligibility to get Lifetime Learning Credit phases out above $160K on a joint return.