However, if he is getting a lot in scholarships, you may not qualify for the AOTC unless he pays tax on the scholarships, and he’ll pay that tax at your (parent) rate. Of course you won’t see that $2500 until you file taxes next year.
If all you have left after tuition, room, board, fees is $12000, it’s likely the qualified expenses for AOTC are covered and he’ll have a taxable amount.
It’s all very confusing … He has $17500 through 4 different scholarships - all of which are distributed through the school and will owe just under $12000 balance for tuition, room and board - not counting books. $7500 of that he can take out in student loans. The remaining $4200 we have to come up with. He qualifies for the $1750 in work study too.
The 1098T he will get for 2017 should list the qualified tuition and fees billed (or paid), and scholarships and grants received.
If some of the scholarships are eligible to be used for room and board, then he can include them in his taxable income, and you can say that your contribution was for tuition, fees, or books (QEE for AOTC).
You don’t have to figure that out now. I just thought I would mention the possibility of qualifying for AOTC, which would help.
My D has a scholarship that is specifically for tuition, so we just claim qualified fees and book expenses towards AOTC and she declares the state grant which pays for room and board as taxable income on her tax return.
We don’t get the whole $2,500 AOTC credit, but $1,000 is better than nothing.
Just remember…his financial aid will be divided amongst his terms. So…some of it will be 2017…and some will,be in 2018…unless the school disburses for the second semester before the end of 2017.