Solved

As a student, Not able to claim an education tax break with 1098-T

Forum|Forum|3 years ago
April 9, 2023
2 replies
0 views

I am in 2nd-year college. My parents do not qualify for 1098-T credit ( because of income ) and not claiming me as dependent. I am filing taxes the first time as an individual.

I made W2: $3880, Schedule C(Ebay 1099-K ) : $800

My 1098-T Box1: 16,060 Box 5: 10000 and full-time student. About $500 in book expense

Based on my income, I don't owe any tax. Should I be able to claim any credits for qualified educational expenses?

Thank you

Best answer by Hal_Al

Q. Based on my income, I don't owe any tax. Should I be able to claim any credits for qualified educational expenses?

A. No. Congress specifically wrote the law to prevent this situation; the parents are not eligible, because their income is too high, so they try to let the kid claim the credit.

A full time unmarried student, under age 24, even if you don't qualify as a dependent, is only eligible for the refundable portion of the American Opportunity Credit if he supports himself by working. You cannot be supporting yourself on parental support, 529 plans or student loans & grants.

Reference: Line 7 instructions for form 8863. https://www.irs.gov/instructions/i8863

________________________________________________________________________________________

While technically there is a provision that allows a 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.

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)

B

Bsch4477

Employee

I assume that your parents are eligible to claim you even if they chose not to. Since you have no tax liability and you are not eligible for the refundable portion of the A0C you will not receive any education credit. It would be better for your parents to claim you so they can get the $500 child tax credit.

R

riyazahmedAuthor

I agree. In this case, they might as well claim and get $500.

Thanks

Hal_AlAnswer

Employee

Q. Based on my income, I don't owe any tax. Should I be able to claim any credits for qualified educational expenses?

A. No. Congress specifically wrote the law to prevent this situation; the parents are not eligible, because their income is too high, so they try to let the kid claim the credit.

A full time unmarried student, under age 24, even if you don't qualify as a dependent, is only eligible for the refundable portion of the American Opportunity Credit if he supports himself by working. You cannot be supporting yourself on parental support, 529 plans or student loans & grants.

Reference: Line 7 instructions for form 8863. https://www.irs.gov/instructions/i8863

________________________________________________________________________________________

While technically there is a provision that allows a 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.

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)