If I am not being claimed as a dependent but only pay for part of my tuition how much can I claim towards educational tax credits.

Forum|Forum|5 years ago
February 19, 2021
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Part of the tuition is a Parent loan and the other is a loan I am obligated to pay? If I can only claim my obligations should I alter the amount claimed in the 1098-B?

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Hal_Al

Employee

You may claim the education credit based on the money spent from both loans. The fact that the loan is not in your name does not prohibit you counting it toward the credit. Do not change box 1 of the 1098-T, for this reason.

Separate issue:

Why are you not being claimed as a dependent? You are not eligible for an education credit if you CAN be claimed as a dependent, It doesn't matter whether you are actually claimed. If you are being supported by money form a parental loan, you most qualify as a dependent*.

Furthermore, 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 (AOC) if he supports himself by working (earned income). 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.

*A child of a taxpayer can still be a “Qualifying Child” (QC) dependent, regardless of his/her income, if:

He is under age 19, or under 24 if a full time student for at least 5 months of the year, or is totally & permanently disabled
He did not provide more than 1/2 his own support. Scholarships are excluded from the support calculation
He lived with the parent (including temporary absences such as away at school) for more than half the year

So, it doesn't matter how much he earned. What matters is how much he spent on support. Money he put into savings does not count as support he spent on him self.

The support value of the home, provided by the parent, is the fair market rental value of the home plus utilities & other expenses divided by the number of occupants.

The IRS has a worksheet that can be used to help with the support calculation. See: http://apps.irs.gov/app/vita/content/globalmedia/teacher/worksheet_for_determining_support_4012.pdf

sperkowskyAuthor

Hello,

I suppose I am a unique case.

I am currently a co-op student meaning while I am a full time student I only attended 1 semester of in person university in 2020.
During the other 8 months I was working and received an hourly wage as well as housing stipends from my workplace.

While my parents did pay for my living expenses while I attended school I attend school in Indiana but work in Chicago. Therefore my living expanses during school were minuscule in comparison compared to the ones I paid for from my personal income. ~$20,000 Vs $4,000

My family lives in NY and over the full year I spent less than 3 weeks in the state.

hopefully I am not missing anything and I would appreciate clarification if I am.

Hal_Al

Employee

Thanks for the explanation. It sounds like you meet the requirements for filing independently and claiming the AOC and you can count the payments from the parental loan.