My ex husband and I have the agreement in our divorce that we swap who claims DS20 as a dependent every other year. I am to claim him in 2019 and he will in 2020. DS turns 18 in 2020 and after that I will claim him every year while he’s in college as child support ends mid 2020 and his dad is not helping with college expenses.
I just realized that I won’t be able to claim the AOTC for the Fall 2020 tuition because his dad will have him as s dependent that year.
My question is, is this worth approaching his dad about swapping years and him getting him 2 years in a row and claiming for 2019 as well? I don’t believe there is any advantage to me claiming him at all in 2019. There is the $500 non-child dependent credit, but it is non-refundable and I’m already leaving a bunch of credits on the table, so I wouldn’t see any of that $500.
Or does it make any difference since the AOTC is only for 4 years and I will be paying tuition for 5 anyhow? (with Spring of 2024).
There are a lot of variables here, so it’s hard to answer your questions without having specific numbers and running through various scenarios. Although the AOTC may only be claimed for a maximum of four years for any one student, the Lifetime Learning Credit is a possibility for the additional year of making tuition payments (it’s not as generous as the AOTC, and like the AOTC income limits apply).
I don’t think I’d get any benefit from LLC either. My AGI is less than 30K, so I’m leaving a lot of non-refundable credits unclaimed as is (portion of child tax credit, savers credit, dependent care credit), however, I can still get $1000 back of 4K tuition paid with AOTC.
If you are already leaving credits unused, it may not matter. Also, I thought your son was looking at full tuition scholarships, so you may not have $4000 (to claim the refundable AOTC) of QEE.
If you can’t use the child credit in 2019, you might as well ask your ex husband to switch 2019 for 2020, but it may not matter. Can your ex benefit from claiming him in 2019 or 2020? He may not care either.
This will be the first year in 24 years when I have no dependents and no HOH designation. Scary.
Yes, it is possible that there won’t be 4K in QEE for Fall 2020. I won’t know that until all the scholarships and aid packages show up.
My ex makes quite a bit more than me. He’s married with 2 young kids so gets quite a bit of child tax credit already, but I’m pretty sure he’d be able to use the $500 non-refundable one as well. We’re very amicable, so maybe I’ll just ask him to run his both ways to see before filing.
Maybe your ex husband would benefit from the AOTC? If he and new spouse make less than $180k and there is QEE, he might get the whole $2500 and agree to give it to your son.
The QEE is ‘paid’ by the student (student’s responsibility). Since the student is a dependent, the parent gets the credit.
If the father takes the AOTC and gives it to the student, he’s really reimbursing the son. It’s the IRS that makes the rules that say the AOTC credit goes to the parent and the school that says the student is responsible for the payment of tuition, etc. Just try getting to see the bill if your student doesn’t allow it. It’s not your bill.
Your ex would have to know all the billing and taxes of your son to do it. It is kind of circular and I found I had to do my taxes with my kids’ because of credits and taxes owed on scholarships. There was stuff from my taxes (tax rate) I had to fill in on my kid’s taxes, and stuff from hers needed for mine for the AOTC. It is different now because the taxable scholarships is not based on the parent’s tax rate but on the estate tax tables. I’m done with that so don’t know if each return can be prepared independent of the other.
I agree that your Ex might be the best one to claim the credit, and if he gives you the money he gets back, it could be the best way to go. He should not give money to your son, but to you, as any money given to the student by a NCP (or anyone other than custodial parent ) is reportable on FAFSa as untaxed income.
It can take planning to figure out the best way to pay the very least in net to a college when tax credits,merit money, financial aid are all involved. With a NCP in the picture it can get even more complicated. It’s very helpful that you and the ex can work together.
Is your ex going to be within the income limits with modified AGI to be able to take AOTC, get more financial advantage than you will?
Very interesting. Thank you all! I will talk with him. We’re amicable, but we’ve been divorced for 15 years and don’t sit around discussing what our AGIs are. I’m guessing he makes around 80K or so if his wife isn’t working (she was working part time in fast food most of this year, but decided to quit and stay home).
With two kids he might still not have much tax liability either. Not sure what he’s doing for retirement or how much insurance costs for him.
I don’t know. I think he actually would if it worked out that he could fully benefit from the AOTC . We get along pretty well and he knows all the college costs are being covered by myself and my parents. I wouldn’t ask for the $500. That’s money I wouldn’t get on my taxes either.
@cshell2 said that she has too many credits/no tax liability, so she’s not giving up $3000, only $1000 (the refundable part of the AOTC if there is actually $4000 of AOTC QEE).
There are a lot of moving parts in this scenario. Her son might pick a school with full COA or full tuition so there may be no AOTC to claim at all. Ex may also not have any tax liability since he has younger children who he is claiming the full child credit for, etc. etc.
I just threw out the option of having her ex take the son as a dependent and seeing if it worked out better for all of them.
Yes, and I pointed out in some situations the parent might not just hand over the AOTC to the student or other parent.
Since only $1,000 of it is refundable, the rest will reduce tax liability, and if they had enough tax withheld, they will receive a refund.
If the relationship is amicable enough, they might give it to the son or other parent to use towards college.
One thing I’m wondering about, if father no longer supports son after high school graduation (child support ceases), he can still claim him as a dependent?
One thing I’m wondering about, if father no longer supports son after high school graduation (child support ceases), he can still claim him as a dependent?
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He would not declare him as a dependent necessarily, though divorced parents can make private arrangements between g thyHe selves as to who gets the child as a dependent Regardless of who is supporting the child. But some of the credits and deductions can be split using Form 8332 and the consent of the custodial parent. It appears OP is familiar with use of this form.
OP and Ex should decide who can best use the deductions that come with a dependent child in college, including the AOTC. If the dad can get more of a financial benefit and is willing to give the prized refundable tax credits to the OP, and OP’s tax situation is such that she cannot get those $s back, absolutely, she should work out something with her ex, at least for this year and see how it goes.
He will still be paying child support through July of 2020, so 7 months of the year. I don’t think we’d be in the wrong having him claim him that year (in fact, the court docs have him claiming him for 2020 anyhow).
After that, I’m not sure. It’s always been kind of fuzzy to me because in order to claim someone as a dependent you’re supposed to provide more than half their support, but what if they’re getting a lot of money in grants, and scholarships and taking student loans? There are a couple schools DS could attend where he could pretty much cover all his costs. I guess they’re home summers and breaks…