W-4 and College Student

[shamari11-11]

My children are 18 and 23 and I still claim them as dependents. What should I put on my W-4 as the head of household? What happens when I'm not claiming them as dependents. What would I put as a single person on my W-4?

When my 18 year old becomes a full time college student, should I be claiming the opportunity credit on my taxes if she owes money or what if she doesn't owe?

[xmasbaby0]

Your kids are too old for you to get the child tax credit.  You only get the $500 credit for other dependents for kids older than 16.    You will be able to claim them as dependents if they are full-time students until the year they turn 24.   So, yes, you will be able to claim the 18 year old.. and file as HOH.    The parent who can claim a full-time student as a dependent is the one who gets to use the American Opportunity Tax Credit.

https://ttlc.intuit.com/questions/3262983-who-is-eligible-to-take-the-american-opportunity-tax-credi...

[shamari11-11]

Thank You!

What about the W-4 question?

[fflores3]

You should file as Head of Household if you are legally separated from your spouse or considered unmarried at the end of the tax year.

When they are no longer your dependents at the end of the year you would need to file as Single.

[marctu]

Thank you for the question.  When neither child is a dependent you should just fill out Step 1 and check Step 1 (c) as Single.  For now, you should check Head of Household in Step 1 (c). 

In Step 3 you would multiply the number of dependents by $500, which in 2024 would be $1,000.  Beyond 2024, it would most likely be only one.

So best of luck to your 18-year-old on going to college.  The American Opportunity Tax Credit (“AOTC”) is a credit for qualified education expenses paid for an eligible student for the first four years of higher education. You can get a maximum annual credit of $2,500 per eligible student. If the credit brings the amount of tax you owe to zero, you can have 40 percent of any remaining amount of the credit (up to $1,000) refunded to you.

The amount of the credit is 100 percent of the first $2,000 of qualified education expenses you paid for each eligible student and 25 percent of the next $2,000 of qualified education expenses you paid for that student. 

There are also income limits for the AOTC, which are:

• To claim the full credit, your modified adjusted gross income (MAGI) must be $80,000 or less ($160,000 or less for married filing jointly).
• You receive a reduced amount of the credit if your MAGI is over $80,000 but less than $90,000 (over $160,000 but less than $180,000 for married filing jointly).
• You cannot claim credit if your MAGI is over $90,000 ($180,000 for joint filers).

The most important part for you is this: 

If you are under age 24 at the end of 2023 and the conditions listed below apply to you, you cannot claim any part of the American opportunity credit as a refundable credit on your tax return. Instead, you can claim your allowed credit, figured in Part II, only as a nonrefundable credit to reduce your tax.

This generally means the parents should claim the credit.  Furthermore, for you this would mean you were still claiming head of household as your filing status @shamari11-11 

[shamari11-11]

Thank you marctu! We're excited for college!

Thanks everyone for your responses it's greatly appreciated and helpful!

[marctu]

As you both should be @shamari11-11 .  I have a recent (two weeks ago) college graduate and another who just finished her sophomore year.  

[shamari11-11]

Congrats and cheers marctu! College is very expensive but rewarding and I wish them both the best of luck!