American Opportunity Credit

[danritter]

<p>I have a few questions about the AOC.</p>

<ol>
<li><p>The IRS website says dependents can claim the credit, but my parents make above the threshold, can I still claim it as their dependent? It doesn't matter to them anyhow because they are not paying for any of my qualified expenses.</p></li>
<li><p>If I apply a scholarship towards tuition, does that still count as my qualified expenses?</p></li>
</ol>

[danritter]

<p>Also, if I cant claim AOC with scholarship money paying for tuition, can I elect to apply my scholarship money on room and board instead that way I am paying for tuition “out of pocket” and thus be able to claim it?</p>

[4kidsdad]

<p>Where in IRS website? Pub 970 says the dependent can’t claim the credit:

</p>

<p>Who Cannot Claim the Credit</p>

<p>You cannot claim the American opportunity credit for 2013 if any of the following apply. </p>

<p>•Your filing status is married filing separately. </p>

<p>•You are listed as a dependent on another person’s tax return (such as your parents’). See Who Can Claim a Dependent’s Expenses , later. </p>

<p>•Your modified adjusted gross income (MAGI) is $90,000 or more ($180,000 or more in the case of a joint return). MAGI is explained later under Effect of the Amount of Your Income on the Amount of Your Credit . </p>

<p>•You (or your spouse) were a nonresident alien for any part of 2013 and the nonresident alien did not elect to be treated as a resident alien for tax purposes. More information on nonresident aliens can be found in Publication 519, U.S. Tax Guide for Aliens.

Unless you’re not really a dependent of your parents (i.e. they do not claim an exemption for you)</p>

[Madison85]

<p>A student can take the AOC if neither the student nor the parent(s) claim the student’s dependency exemption. However, unless the student provides over half of his support through earned income, the student is limited to the nonrefundable portion of the credit (the portion that offsets the tax liability).</p>

[4kidsdad]

<p>

However, unless the student provides over half of his support through earned income, the student is limited to the nonrefundable portion of the credit (the portion that offsets the tax liability).

For details see Pub 970

You do not qualify for a refund if items 1 (a, b, or c), 2, and 3 below apply to you.
1.You were:
a.Under age 18 at the end of 2013, or
b.Age 18 at the end of 2013 and your earned in-come (defined below) was less than one-half of your support (defined below), or
c.Over age 18 and under age 24 at the end of 2013 and a full-time student (defined below) and your earned income (defined below) was less than one-half of your support (defined below).</p>

<p>2.At least one of your parents was alive at the end of 2013.</p>

<p>3.You are filing a return as single, head of household, qualifying widow(er), or married filing separately for 2013.

</p>

[4kidsdad]

<p>

If I apply a scholarship towards tuition, does that still count as my qualified expenses?

Your qualified expenses must reduced by the tax-free educational assistance

Tax-free educational assistance includes:
The tax-free parts of scholarships and fellowships …
Pell grants …

See Pub 970 for details</p>

[swimcatsmom]

<p>Tuition paid with a scholarship or grant does not count as a qualified expense. Scholarships/grants also do not count as providing more than half your own support (when calculating whether you are able to claim your own exemption or if your parents are the ones eligible to claim you as a dependent)</p>