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June 7, 2021
Question

Helping a friend . She is a college student. Her parents are not claiming her for 2020. She lives at home, doesnt pay rent. Is she eligible for either AOTC or LLC?

  • June 7, 2021
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2 replies

Employee
June 8, 2021
**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
Hal_Al
Employee
June 8, 2021

Q. Is she eligible for either AOTC or LLC?

A. Simple answer: No.  If she can be claimed as a dependent, whether she actually is or not, she is not eligible for a tuition credit*.

 

Furthermore, 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 (AOTC) if he supports himself by working. You cannot be supporting yourself on parental support, 529 plans or student loans & grants. You usually must have actually paid tuition, not had it paid by scholarships & grants.  It is usually best if the parent claims that credit. 

 

*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.