Wouldn’t the provided housing be a wash? It wasn’t parent provided, it wasn’t student provided. It just isn’t a factor. It might also be taxed for IRS purposes, and then it the student is ‘paying’ for that housing.
Wouldn’t the student need an income of $25,000 or more to have a tax liability of $2,500?
@mommdc It would not surprise me if this student is an engineer that he made over that amt.
The tax rate switches to 15% at some point, so it is not quite $25000 needed to have a $2500 tax owed. Plus, it is still a benefit if the taxpayer only has $1000 of tax liability. The question would be whether it is advantageous to ‘save’ the AOTC for another school year since you/student can only use it for 4 years.
Did your son lived at the co-op for 7 months of 2016. If yes, regardless of the fact that the employer provided it, he was not at home. In this case, I think you would say that he was not a resident of your house for 1/2 of the year. This is a separate test for dependency. If he does not live with you and fails that test, the question of 50% support is not relevant. There is an exception to the residence test for education, but I think you can say the co-op is a job.
OP here. To clarify yes my son made a rather staggering amount of money (Comp Sci intern at prestigious company). His company paid the housing but it will be on his W-2. He paid a lot in taxes.
We will have paid more in tuition, room and board for the fall semester than he did for his $3750 share, apartment allotment and expenses while on coop. I think. I’m going to ask him to add up his credit card bills. So what you all are saying is that we look at this purely from his perspective and not include household expenses as it says on the worksheet? That is what is throwing me - the worksheet.
Thanks very much.
@Njmom224 yes he was on coop from early Jan to the end of July. Home in August and back to school late August to December.
@Madison85 to answer your question - no car and no car insurance. He’s a public transportation guy. You’ve all been so helpful fleshing this out. Ask away!