<p>I am using the Online Version [TaxACT</a> | Free Tax Preparation Software, File Taxes Online, Free E-filing](<a href=“http://www.taxact.com%5DTaxACT”>http://www.taxact.com). At the top right it says my Fed refund is 572 and State refund is 259.</p>
<p>I went back and clicked No on </p>
<p>**You do not qualify for a refund if items 1 (a, b, or c), 2, and 3 below apply to you. </p>
<ol>
<li>You were:</li>
</ol>
<p>a. Under age 18 at the end of 2011, or</p>
<p>b. Age 18 at the end of 2011 and your earned income (defined below) was less than one-half of your support (defined below), or</p>
<p>c. Over age 18 and under age 24 at the end of 2011 and a full-time student (defined below) and your earned income (defined below) was less than one-half of your support (defined below). </p>
<ol>
<li><p>At least one of your parents was alive at the end of 2011.</p></li>
<li><p>You are filing a return as single, head of household, qualifying widow(er), or married filing separately for 2011.**</p></li>
</ol>
<p>Then it went from 572 to 1,572. But I must choose yes because both parents are still alive.</p>
<p>But on the very next screen after choosing yes it says</p>
<p>** Education Benefit Qualifies
American opportunity credit Yes
Lifetime learning credit Yes
Tuition and fees deduction Yes**</p>
The refundable part of the AOC does have some restrictions for students that are under 24 whose parents are alive. Your *earned *income must be sufficient to provide at least half your own support from earned income in order to get the refundable AOC. Is there a question about that in the tax program you are doing?</p>
<p>How old were you at then end of 2012 and why don’t your parents claim you as a dependent? Do they not provide over half of your support? Did TaxAct ask you about your support and if your parents are alive? </p>
<p>It may be better for the family as a whole if your parents can legally claim you as a dependent and then take the AOC. You would have to pay a little tax but they would likely get more of a tax break than you can get and you could split it up amongst you.</p>
<p>When figuring a student’s support, scholarships and grants the student gets are not considered support the student provided themselves.</p>
<p>It says you qualify for the AOC and you do, just not the refundable part.</p>
<p>If you are under the age of 18 and a full-time student, and someone else provides half of your support, then you are a dependent of your parents. </p>
<p>If you are providing over half of your own support, then part one doesn’t apply, and you should check no - that AND is important.</p>
<p>There is definitely something wrong with their programming - you are not eligible for the AOC, not even the non-refundable portion, if you are a dependent. </p>
<p>At the beginning of their interview, there should have been a question asking if you are claimable as a dependent - it you are not providing half of your own support, you need to check yes to that question. You are not legally entitled to choose to claim yourself if your parents choose not to claim you. They need to claim you as their dependent, and they will get the AOC on their tax return.</p>
<p>I am going to have to talk to him about that. But if he claims me how will I get my federal and state back? If I am not mistaken 2 people can not claim one person? and he claims my younger bother and sister, I remember him telling me he can only claim two children or something. Thats why I did my taxes last year and got state and federal back.</p>
<p>Any suggestions to the above scenario then?</p>
<p>A full-time student over age 18 and under age 24 at the end of 2012 and your earned income was less than one-half of your support.</p>
<p>Hold on, My earned income is almost 90% of my support I would say, My father provides me shelter, I pay my own bills, car insurance, etc…he supports me based on housing needs while I am in school and working.</p>
<p>So I would say I do supply over half of my own support…so in other words…I do qualify…I hate these questions lol, I read that one of my parents are still a live and clicked yes</p>
<p>Do you have health insurance through your dad? If so, that right there would be worth more than half of the $10,000 you made in 2012. You would still file for a refund of most of what you paid in taxes on that income. At the most, you should only get all of the tax dollars you paid in, you wouldn’t get refunded more than what you paid.</p>
<p>First, he can claim any number of children - there is not a limit as he suggests. He may be thinking of Earned Income Credit where the maximum benefit used to be from claiming 2 children, but even that has changed.</p>
<p>When you calculate support you must include all support - housing, food, clothing, insurance… </p>
<p>You will still file a tax return (in fact you are required to file one. He only claims your exemption (makes $3800 of your income untaxable), you still get your standard deduction ($5950). </p>
<p>Your income was 10,981 (rounded to nearest dollar), subtract out the 5950, and that leaves you wil $5031 taxable income, which should result in tax of $503. Subtract that from the $572 withheld from your wages, and you will get back $69.</p>
<p>When your father claims you, he will have $3800 less taxable income, and will be entitled to claim the AOC. If he is eligible for earned income credit, his credit amount (which is completely refundable) will be higher with 3 children instead of 2.</p>
<p>If he has not claimed you prior to last year because he thought he could only claim 2 children, it might be beneficial to go back and amend his returns (he can do this as far back as 2009) EITC was expanded for up to 3 children all 3 of those years. As longs as someone else didn’t claim you, he can add you to those tax returns. For 2011 when you claimed yourself, you would need to amend your return as well.</p>
<p>If your dad can claim you and take the American Opportunity Credit, he may save $2,500 or more in federal income taxes. If you claim yourself, it looks like you are saving less than $200. Often in these cases, the parent claims the child and then gives the child the tax savings (up to $2500 or more). Both returns can be prepared ‘with’ and ‘without’ in order to determine the net savings.</p>
<p>If a student does not provide 50% of his own support, he cannot legally claim himself. Yes, people do it all the time, that doesn’t make it right. And you really don’t want to get caught committing tax fraud.</p>
<p>I disagree with ^^. My understanding is that from a regular filing tax point of view, that is not the case. A parent is allowed to claim their student as a dependent if they meet all the qualifying child criteria, they do not *have *to claim the student. The child can claim themselves and take the personal exemption. If the student did provide more than half their own support, including from loans, the parent can not claim the student.</p>
<p>But for the AOC, the rule for the refundable part of the credit is slightly different. First, the student must not be able to be claimed by anyone else. (if he provided >half his own support, that would be the case). 2nd, if the student, is under 24, he must provide half his own support from *earned *income (not including loans). That can be a gray line when the student has a reasonably high income as the OP does.</p>
<p>Aren’t taxes and trying to interpret the rules fun. Even CPAs often disagree about how to interpret the rules.</p>
<p>The parent is certainly not required to claim the student. However, if a student CAN be claimed by his parents, he cannot claim his own personal exemption (Publication 501, page 10):</p>
<p>
</p>
<p>If he provides half of his own support, then he cannot be claimed as a dependent by someone else, and he can claim his personal exemption. And yes, AOC can be tricky when loans (and savings) come into play. But remember also that if the parents cosigned or guaranteed the loans, those loans are considered support provided by the parent (because they student couldn’t get them without the parent).</p>
<p>(crossposted with 4kidsdad) guidance is available to both parent (as he indicated), and to the dependent student.</p>
<p>H&R Block agrees with you; JK Lasser does not; neither provides any authority for their -positions. </p>
<p>CCH is silent, referring to a couple of Rev Ruls (67-61 and 77-282, for the curious). Neither Rev Rul covers cosigners or guarantors; 67-61 says you must “incur an unconditional obligation to pay for the items of support” and requires “something more than a taxpayer’s unfulfilled duty or obligation to pay.” PLR 6506119330A says that a situation in which the taxpayer “may never be required to pay the balance due” is not an “unconditional obligation to pay.” From that I conclude that a parent co-signing or guaranteeing a loan does not mean that the expenses paid with the loan proceeds are parent support, particularly if the parent has a right of contribution against the kid under state law.</p>
<p>Anyone choosing to take the position that they provided >50% of support based on cosigning loans should be aware that that position is not obviously the most correct one, and they may have exposure. (I’d call it worse than “more likely than not” and better than “not frivolous.”)</p>
<p>How old are you? If you’re under the age where your parents could have claimed you, you can’t get the refundable portion of the AOC unless you provided more than half of your support from earned income.</p>