Question

student as a dependent OR filing herself to get AOTC. How much will that hurt her parents married filing jointly return?

Forum|Forum|3 years ago
April 8, 2023
2 replies
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Hi. I have completed (but not filed) our taxes for 2022. I claimed my oldest daughter, a full-time college student, as a dependent. Our married filing jointly income is too high for the AOTC. But, couldn't my daughter file her own taxes, and because she didn't make very much income take advantage of the AOTC? But if she does that, how bad will it hurt our normal taxes to lose her as a dependent? Would the trade off be worth it?

E

ErnieS0

No. Dependency is not a choice. Your daughter cannot use the American Opportunity Tax Credit if she can be claimed as a dependent, even if you don’t claim her on your tax return.

TurboTax asks if “another taxpayer can claim me as a dependent” and then “someone will claim me in 2022.”

Answering YES to the first question makes your daughter ineligible for AOTC.

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Hal_Al

Employee

One rule is: if a person CAN be claimed by another, he may NOT claim himself, even if the other person does not actually claim him.

While technically there is a provision that allows your student-dependent to claim a federal tuition credit, from a practical matter it seldom works out. A student, under age 24, is only eligible for the refundable portion of the American Opportunity Credit (AOTC) if he/she supports himself by working. She cannot be supporting herself on student loans & grants and 529 plans and parental support.

If the student actually has a tax liability, there is a provision to allow him to claim a non-refundable tuition credit. But then the parent must forgo claiming the student as a dependent, and the $500 other dependent credit. The student must still indicate that he can be claimed as a dependent, on his return. This is worth up to $2500 (AOTC shifts to all non refundable). But, you said "she didn't make very much income". The best she'll see is to have any tax liability wiped out.