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April 14, 2021
Question

I received the American opportunity credit last year for the first time. I am still in school but this year turbotax didn't claim it even though I'm eligble.

  • April 14, 2021
  • 1 reply
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For some reason turbotax says the tuition deduction is better even thought my income has barely increased (4000 last year to 7000 this year). It says that I would get $0 by claiming the American Opportunity Credit this year even though I got $1000 last year.

1 reply

Hal_Al
Employee
April 14, 2021

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. 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. 

In the personal info section, when TurboTax detects that you are under age 24, it will ask if you provided more than half your support with earned income. You must answer that question YES. 

 

You cannot claim a credit if you are, or can be, claimed as a dependent by someone else.

April 14, 2021

I am not claimed as a dependent (wasn't last year either when I received the credit) and I do pay about ~$3000 in tuition after my scholarship/grants/federal loans are applied using wages.

Hal_Al
Employee
April 14, 2021

If only $3000 of your support comes from earned income, then you are not eligible for the refundable portion of AOC, unless you are not a fulltime student or are over age 23.