Help with Lifetime Learning Credit

[rsa14]

I'm filing for my son.  He is 26 years old and attending Medical School (second year).  I added his 1098-t and his income was about 36k for the year, including $3k for earned income and $33k for investment (unearned).   Yet he is "ineligible" for the LLC.  He now owes according to TT $270 in federal and $1600 in MA State Taxes - Shouldn't he be eligible for LLC since he spend $69k in tuition charges on 1099T?

[AmyC]

Yes, it would seem so. Either there is more to the story or something was not fully entered. Here are the rules from IRS LLC:

To claim the LLC, you must meet all three of the following:

1. You, your dependent or a third party pay qualified education expenses for higher education.
2. You, your dependent or a third party pay the education expenses for an eligible student enrolled at an eligible educational institution.
3. The eligible student is yourself, your spouse or a dependent you listed on your tax return.

See "Who Cannot Claim an Education Credit" on our Education Credits — AOTC and LLC page.