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Question

Can I claim college or education expenses if my parents paid for them?

Forum|Forum|2 years ago
August 11, 2023
1 reply
0 views

This question has been asked, but the answer is not clear.

My parents did NOT claim me as dependent.

I have some internship $s that I earned that I have W2. I have 1098 from my college.

Can I get credit in my tax filing ?

Employee

Q. Can I claim college or education expenses if my parents paid for them?

A. Simple answer: yes. Although the general rule, in taxes, is that you must be the one making the payment, to get the deduction or credit, there is an exception for education.

Q. Can I get credit in my tax filing?

A. Yes, if you otherwise qualify. The fact that your parents paid the expenses does not disqualify you.

But, other factors may disqualify you. You say your parents did not claim you as dependent. But, if they could have claimed you as a dependent, you would be disqualified for the refundable portion of the most generous education credit (the American Opportunity Credit), unless you are over age 23. If your parents forego claiming you as a dependent (when they are allowed to claim you), you are only eligible for a non refundable credit. That is, you only get enough credit to reduce your actual tax liability, if any. The credit is worth up to $2500. Essentially, if your W-2 is less than $12,950, you will not get any credit and your parents will lose the $500 other dependent credit. If you are claimed as a dependent, on their return, they can claim the education credit of up to $2500 (unless their income is too high to qualify).

@Hal_Al - can you please help me out with your response?

I thought that AOTC is the unique case where whether someone can claim the taxpayer (the student) and didn't was immaterial to whether the student was eligible for the refundable portion of the credit.

Rather, if the student is not claimed by anyone else (even if they could be), the Student is NOT eligible for the refundable credit if: a) under 24 and earned income < ½ of support, and b) at least one parent alive and c) not filing MFJ.... otherwise, the student is eligible for the refundable credit.

thanks!

Employee

@NCPERSON1 good catch, thanks. I was trying to say that, as most students who qualify as a dependent, are under 24. Of course, if the student qualifies as a dependent, he does not meet the support test. But my answer was poorly worded. I have revised it.

There's a new urban myth among college students that says they can get a $1000 from the government just for filing a tax form. For most of them, they simply aren't eligible. 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 (unless he's an orphan). You cannot be supporting yourself on parental support, 529 plans or student loans & grants. It is usually best if the parent claims that credit.