<p>For tax purposes, I only claim two of my four kids as dependents. They are in college, supported by their student loans. This allows them to take advantage of the Hope Credit, and as a family makes the most sense from a tax perspective. My question is, by not claiming them as dependents on the FASFA, does this reduce our changes of receiving any financial aid?</p>
<p>How the dependent child appears on your tax return has no bearing on the EFC calculation that FAFSA does. They can file their own taxes as individuals or be a dependent on yours, it doesn’t matter.</p>
<p>If they are under 24, haven’t been in the military and don’t have dependents they support then they are your dependents for FAFSA purposes.</p>
<p>The Hope Credit no longer exists. It is now called the American Opportunity Credit and if the student is under 24, unless they support themselves with earned income, they do not get the refundable part of the credit, but you do. I would recalculate and see if it is better for you to claim them. Either way, it does not make them independent for FAFSA purposes.</p>
<p>Thank you for your help. Doesn’t the American Opportuity Credit go away once your income hits a certain limit?</p>
<p>Yes it does. But if the student is under 24 with no earned income (supporting themselves with loans) they have no tax liability so don’t get the non refundable part of the credit, and they don’t get the refundable part either.</p>
<p>Also, if you make too much for the AOC, then there’s a good chance they won’t be getting any need based financial aid and you’re not a “poordad”</p>