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February 5, 2024
Question

Refundable American Opportunity Credit I recieved it last year but not this year? Why is this?

  • February 5, 2024
  • 1 reply
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1 reply

Hal_Al
Employee
February 5, 2024

You did something wrong, either last year or this year. Most likely, last year.

 

While technically there is a provision that allows your student-dependent to claim a federal tuition credit, from a practical matter it seldom works out.  A student, under age 24, is only eligible for the refundable portion of the American Opportunity Credit (AOTC) if he/she supports himself by working. She cannot be supporting herself on student loans & grants and 529 plans and parental support.  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. This is worth up to $2500 (AOTC shifts to all non refundable).

 

So, the answers you give, in the interview, either qualifies you or  disqualifies you.