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My 20 year old still lives with me, she works and is a full time student. which one of us uses the 1098 T form

Forum|Forum|7 years ago
June 6, 2019
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Best answer by Hal_Al

It depends on who claims her exemption (dependency). That is most likely you (see rules below). The education credit goes to the person claiming the student's exemption, whether that be himself or his parent.

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

1. 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

2. He did not provide more than 1/2 his own support. Scholarships are considered third party support and not as support provided by the student.

3. 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 you provided is the fair market rental value of the home plus utilities & other expenses divided by the number of occupants.

Furthermore, there is a rule that says IF somebody else CAN claim him as a dependent, he is not allowed to claim his own exemption. If he has sufficient income (usually more than $6350), he can & should still file taxes; he just doesn’t get his own $4050 exemption (deduction). In TurboTax, he indicates that somebody else can claim him as a dependent, at the personal information section.

Even if he had less, he is allowed to file if he needs to get back income tax withholding. He cannot get back social security or Medicare tax withholding.

Hal_AlAnswer

Employee

It depends on who claims her exemption (dependency). That is most likely you (see rules below). The education credit goes to the person claiming the student's exemption, whether that be himself or his parent.

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

1. 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

2. He did not provide more than 1/2 his own support. Scholarships are considered third party support and not as support provided by the student.

3. 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 you provided is the fair market rental value of the home plus utilities & other expenses divided by the number of occupants.

Furthermore, there is a rule that says IF somebody else CAN claim him as a dependent, he is not allowed to claim his own exemption. If he has sufficient income (usually more than $6350), he can & should still file taxes; he just doesn’t get his own $4050 exemption (deduction). In TurboTax, he indicates that somebody else can claim him as a dependent, at the personal information section.

Even if he had less, he is allowed to file if he needs to get back income tax withholding. He cannot get back social security or Medicare tax withholding.

Employee

You use the the 1098T on your tax return. If your child is 20 and a full-time student you can claim her as your dependent with no limit on how much she may have earned.

MY DEPENDENT HAD A JOB

If your dependent has a W-2 for his after-school job, summer job, etc. you do not include the information on your own return. You can still claim your child as a dependent on your own return. He/she can file his own return for a refund of some of his withheld wages (he won’t get back anything for Social Security or Medicare), but MUST indicate on it that he can be claimed as a dependent on someone else’s return. (Supervise this closely or prepare it for him!)

If your dependent’s earnings were over $400 and were reported on a 1099Misc then he must file a return and pay self-employment tax for Social Security and Medicare. You may want to use this version of TT for that:

https://turbotax.intuit.com/taxfreedom/

**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.**

Employee

Either you or the daughter, but not both.

Most likely you will be eligible for the American Opportunity Credit (AOC), which allows a maximum credit of $2,500 for an eligible student attending an eligible educational institution.

In addition, up to 40% ($1,000) of the AOC is refundable, allowing taxpayers who do not have a tax liability to claim the credit.

You May Claim the Education Credit
If you (taxpayer) claim the daughter (student) as a dependent, only the taxpayer may claim the education credit for the student's qualified tuition and related expenses. If your daughter works and provides more than half of her own support you cannot claim her as dependent on your Tax Return*. If the taxpayer claims an exemption on the tax return for an eligible student who is the taxpayer's dependent, treat any expenses paid (or deemed paid) by the taxpayer's dependent as if the taxpayer paid them. Include these expenses when figuring the amount of the credit.
You daughter (student) May Claim the Education Credit
If you are eligible to but does not claim your daughter as a dependent, only the daughter may claim the education tax credit for the student's qualified tuition and related expenses. If you paid expenses but does not claim your daughter as a dependent, the student may claim these expenses as if the student paid them.

For the lifetime learning credit, which calculated as 20% of up to $10,000 of qualified expenses. The maximum amount of the credit is $2,000.

If there are qualified education expenses for your dependent during a tax year, either you or your dependent, but not both of you, can claim a lifetime learning credit for your dependent's expenses for that year.

For you to claim a lifetime learning credit for your dependent's expenses, you must also claim an exemption for your dependent.
Expenses paid by dependent. If you claim an exemption on your tax return for an eligible student who is your dependent, treat any expenses paid (or deemed paid) by your dependent as if you had paid them. Include these expenses when figuring the amount of your lifetime learning credit.

Expenses paid by you. If you claim an exemption for a dependent who is an eligible student, only you can include any expenses you paid when figuring the amount of the lifetime learning credit. If neither you nor anyone else claims an exemption for the dependent, only the dependent can include any expenses you paid when figuring the lifetime learning credit.

Video: Guide to IRS Form 1098-T Tuition Statement https://turbotax.intuit.com/tax-tips/college-and-education/video-guide-to-irs-form-1098-t-tuition-st...

How do I enter Form 1098-T? https://ttlc.intuit.com/replies/4194409