<p>Have posted this in the parent section as well but am hoping someone here can help.
We, as parents, have always taken the tuition/hope/lifetimelearning/American opportunity credit for our daughter on our taxes as she was our dependent. She graduated in May 2010 and therefore no longer qualifies as our dependent. We paid tuition for Jan-May 2010. How do we figure in this credit on our taxes as she is no longer claimed by us? Can we or does she claim it on her taxes even though we were the ones who paid it? Could not find the answer to this on the IRS site and may have to call them, but this certainly is not a new issue. How do other parents handle this?</p>
<p>If you are not claiming her as a dependent you cannot claim the credit. Only she can. If she is not claimed as a dependent she is considered to have paid the expenses. </p>
<p>From IRS 970 page 13</p>
<p>
</p>
<p>IRS publication 970 <a href=“http://www.irs.gov/pub/irs-pdf/p970.pdf[/url]”>http://www.irs.gov/pub/irs-pdf/p970.pdf</a> seems unambiguous on this:</p>
<p>
</p>
<p>Did she really pay more than half her total expenses for the year? (If so, congratulations – that’s a challenge for most new college grads.)</p>
<p>mathmomvt, that’s not ambiguous. If no one can claim your D, only she can take the credit. Even though you paid the expenses, if you aren’t claiming her as an exemption you cannot take the credit.</p>
<p>I said <em>un</em>ambiguous…</p>
<p>Oops … sorry. And I get irritated when students don’t read things … :)</p>
<p>Didn’t you pay over half of her support for 2010? Many parents claim their child as a dependent for the year which includes May graduation.</p>
<p>Thanks for all the responses. She has been on her own since graduation, paying rent, loans, food, insurance, etc. from her job earnings. She did put 0 on her W4 for # exemptions (not sure why, but that is water under the bridge and has been changed for 2011). However, she was a student for 5 months of 2010. I see there are some calculations to be done. Hate these non corresponding “years” (academic vs calendar.)</p>
<p>She has to meet all the qualifying tests for you to be able to claim her as a qualifying child.</p>
<p>Relationship, Residence, Age, and Support.</p>
<p>Relationship: your child
Residence: must reside with you for at least half the year (they are considered to be residing with you while in college). Sounds like she may not meet this if she has been living on her own since graduation.
Age: under 19, or between 19 and 24 and a full time student for at least 5 months of the year
Support: can not have provided more than 50% of their own support for the year</p>
<p>Now remember you can only take Education Tax Credits for your dependent for 4 years in a row! We ran into this when a child graduated in '09 & the Form 1098-T came in with “zero” in that box for qualified expenses! So we looked back at tax returns & found:</p>
<p>Fall Semester Freshman Year - Took a Tax Credit
Spring Semester Freshman Year & Fall Semester Sophomore Year-Took a Tax Credit
Spring Semester Sophomore Year & Fall Semester Junior Year-Took a Tax Credit
Spring Semester Junior Year & Fall Semester Senior Year-Took a Tax Credit </p>
<p>So we were not allowed any more Education Tax Credits for this child & we had thought that last semester of Senior Year we would be able to, not so! </p>
<p>Our education tax credits for 4 children over 11 years will total $34,000 ! :)</p>
<p>Residence: must reside with you for at least half the year (I assume 6 months?)
Age:full time student for at least 5 months of the year
Yeah, would be nice to have these numbers at least agree on the irs site.<br>
Penalty for doing well and acting responsibly and getting a job, I guess. 
Ran into the same issue with car insurance - could no longer get the good student discount since she was no longer a student. No discount for graduating in 4 years, finding a job and immediately paying off part of loans (one loan completely paid off before the grace period even ended!) Ahh, welcome to life.</p>
<p>@SLUMOM what about the Lifetime Learning Credit? – I am by no means an expert but it sounds like you can take that one after the 4 years of American Opportunity Credit run out. You still have to be claiming the child as an exemption on your taxes, though.</p>
<p>
That is odd. The school should still list the qualified expenses. it is not up to them to determine when/if you take a credit. And you should still have been able to claim the lifetime learning credit. That does not have a time limit on it.</p>
<p>
But the student can now take the tax credit as he/she is not claimed as a dependent. So it is more like a reward for the student. (maybe a penalty for the parents for raising such a responsible child 
)</p>
<p>Do you/your student fill out the return yourself. Student earned less than $800 in summer 2010 before freshman year. I guess they do their own return and parent does one.</p>
<p>The numbers on the 1098-T for this child for last semester of college, spring of Senior Year, came out to zero. The college listed payments made & grants for that time period, and so that was how it came out, to zero. The college did not list any tuition charges. We had no “qualified expenses”, so my accountant said no education tax credits. And I work for the accountant so I certainly wasn’t going to argue, he is a tax professional. 
</p>
<p>If that Box 1 on the 1098-T has nothing in it, no education tax credits! </p>
<p>It may well be that it was because this schools uses “Comprehensive Fee” type billing & everything was billed into the previous year. Fortunately, we had paid in enough federal income taxes so it wasn’t a problem for us with our income taxes. </p>
<p>Should this child go to grad school, she of course will be able to take her own education tax credit as she is now independent. </p>
<p>So when you get to a tax year with College Senior’s Spring Semester, you might not be able to take an Education Tax Credit on that year’s tax return, if child is your dependent for that year. It all depends on what the form 1098-T says for that child.</p>
<p>Correction on my above post, Box 2 of the Form 1098-T is for “qualified expenses.”<br>
Better put on my readers when I read those tax forms!</p>
<p>Not sure about the Box 1 comment (SLUMOM)?</p>
<p>Box 2 of the 1098-T form is for “qualified expenses”, you need a number in that box from the college to take any Education Tax Credits.</p>
<p>In my post #16 I referred to Box 1 as having the “qualified expenses”, that was wrong.</p>
<p>thanks. That is what I was thinking, although it is new to me. </p>
<p>All this about qualified expenses. The form the colleges send, I don’t believe covers things like the travel, etc. living expenses, books, computer? etc. </p>
<p>Then got 529 plan statement…</p>
<p>I am sure after yr. 1, I will get this, but this is new to me. I usually do my own returns…but we will see.</p>