Can I split education costs on a 1098-T between two tax returns, 1 to offset a 1099-Q and 1 to offset education expenses?

My daughter is in college.  We claim her as a dependent. I am a recipient of a 529 distribution and have a 1099-Q.  I need to claim enough education expenses on my form to offset the 529 distribution.  Can my daughter claim the rest of the eduction expenses on her form to get education deductions to offset her earned income from her job?
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    Yes, but not exactly. Since she is your dependent, you claim the tuition credit on your return, not hers. She is not allowed to claim the credit/deduction. You use enough education expenses to get the maximum credit; usually $4000 to get the $2500 American Opportunity Credit. Then use the rest to offset the 1099-Q. If the 1099-Q is in her name & SSN, it goes on her return, not yours.
    • Hal_Al, I think my problem is my income is too high for me to claim any education deductions.  Also, is it true that if I "can" claim my daughter on my tax return, it doesn't matter if I actually do, or not, she still can't get the education credits/deductions on her form?  The 1099-Q is in my name with her as the beneficiary.
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    Psyblade,
    There is actually an exception to the general rule, that a child can't claim the credit, for your exact situation. You can forgo her exemption, on your return, to allow her to claim the education credit/deduction. However she probably is not eligible for the (up to) $1000 refundable portion of the American Opportunity Credit. So, for it to be beneficial to the two of you to do so, she would have to have a tax liability greater than what you would lose ($3650 times your marginal tax rate) by not claiming her as a dependent. That's a rare situation.

    You should be aware that there are restrictions on a student claiming himself and getting the refundable portion of the American Opportunity credit. It is usually best if the parent claims the credit rather than the student. He/she does not qualify for the (up to)$1,000 refundable portion of the American Opportunity Credit (AOC) if items 1, 2, and 3 below apply to him.

    1. He was:
    .....a. Under age 18 at the end of 2010, or
    ......b. Age 18 at the end of 2010 and his earned income was less than one-half of his support, or
    ......c. A full-time student over age 18 and under age 24 at the end of 2010 and his earned income was less than one-half of his support .
    2. At least one of his parents was alive at the end of 2010.
    3. He is not filing a joint return for 2010.
    • I am in this same situation.  I actually think you can do this - but since your daughter can be claimed as a dependent, she cannot claim the refundable portion of the American opportunity tax credit. When I did this on my daughters return, the credit was applied to taxes she paid from her job. We were able to offset her taxes with the credit such that she received a full refund of her taxes.

      This is based on this page:
      http://www.irs.gov/publications/p970/ch02.html#en_US_2010_publink1000204403
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    lucyl123,
    No you cannot do that. Two taxpayers cannot claim a tuition credit based on the same student. If the student is a dependent, only the person claiming the dependency can claim the credit. Yes, you can "get it to work" in TT, but it's wrong, and I'm pretty sure the IRS computers will catch it.
    You've appeared to have read into that page, that the denial of the refundable portion means that they can get the other portion. That is incorrect. Earlier it clearly states that any credit  can only be claimed once.
     Furthermore, the refundable portion of the American opportunity tax credit is not only denied to a dependent, it's denied to anyone, under age 24, who does not support themselves with earned income.
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