Dependent question and education question (another taxpayer can claim me as a dependent on their tax return)

[Jakesters29]

hello i had a dependent and education credit (received a 2024 1098-T) question so while doing my taxes there’s a question at the beginning that says “select all that apply” I selected the “another taxpayer can claim me as a dependent on their tax return” because I receive disability benefits (SSDI) and have a mental disability but there was a another question after selecting that another taxpayer can claim me as a dependent on their return asking “Will this person claim you on their 2024 tax return?” My question was do I HAVE to be claimed as a dependent does my mom have a choice? Can I put no to that question if she’s not gonna claim me? She’s required to do a tax return since she worked a salaried job in 2024. Does she have a choice or does she have to claim me? Can I still claim the education credits if I put no? (If she’s not gonna claim me but she CAN claim me anyways?)

[KrisD15]

The purpose of that question is this-

There are two education credits, 

The American Opportunity Tax Credit

The Lifetime Learning Credit

Both credits can lower your tax, meaning if you owe tax, and then get the credit, the credit will be subtracted from your tax liability.

The American Opportunity Tax Credit is even more  valuable because  it can lower your tax, but also be added to your refund. 

So if you're eligible for a credit and the credit zeros-out your tax, only the American Opportunity can add up to 1,000 to your refund and only IF YOU ARE NOT A DEPENDENT.

For some students that have a tax liability, it might make sense to make this selection if their parents can't claim the credit because the parents have too high an income to be eligible for the education credit.

This student would select "Someone else can claim me" 

But NOT "Someone else will claim me"

This is saying "yes, my mom COULD claim me but she isn't". 

Now the dependent student not being claimed on anyone's tax return can get the NON-REFUNDABLE part of the credit only. If they can get the credit and they have a tax liability, the credit can lower their tax liability. It does not give them the 1,000 refund. 

So try to decide who would get more by taking the credit, and if it's your mom, have her claim you. 

If you do not have a tax liability (which means you would have had to earn more than 15,000 in wages) the credit would do you no good. 

Pub 970 explains further  

[Bsch4477]

When you say that she won’t claim you that permits you to get the education credit. However if claiming the American Opportunity Credit you can only get the non refundable portion. So if you owe little tax it won’t do you much good. It is generally better for the parent to claim the student Ang get the education credit. 

[Jakesters29]

Thanks for the answer def answers my question!