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June 1, 2019
Question

Can my dependant use the 1098-t to get the credit on their return? I am claiming a dependant student with a 1098-t. I can't claim tax break as income exceeds the max.

  • June 1, 2019
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    1 reply

    Employee
    June 1, 2019

    For your child to claim the AOTC, you can't claim them as a dependent.  However, they must still check the box that says "I can be claimed as a dependent." (There is a separate question, "will the person who can claim you, actually claim you this year" that they will answer no.)

    However, their credit will be limited to their income tax liability for the year.  They can zero out their tax owed and get a full refund of any withholding, but they can't get the remaining part of the credit refunded to them.  For examples, suppose their taxable income was $15,000 last year.  They would owe $300 income tax.  The AOTC would be worth $300 and would zero out their tax owed, but they won't get the remainder of the $2500--that part of the credit can't be refunded to a student claiming the credit if they are eligible to be claimed as a dependent by their parent, even if the parent doesn't claim them.  (And if the student does not check the "I can be claimed as a dependent" box to qualify for the full refundable credit, and the IRS catches you, you both get banned from claiming the credit in future years.)