<p>We are claiming our 18yo college freshman as a dependent as he meets all the requirements and is a commuter student. He will be filing his own taxes for his wages earned. He has a form 1098T for tuition billed/qualified expenses. Can he claim the American Opportunity Credit on his tax return with this info even though he's our dependent, or do we have to claim it? We took a $500 withdrawal from his 529 account to help cover costs for him. If he takes the credit, does that affect our tax liability for the withdrawal?</p>
<p>Only the person claiming the exemption can take the AO credit. So if you are claiming him as a dependent then only you can take the credit. </p>
<p>It is actually generally more beneficial for the parent to take it as the refundable part of the credit (up to $1000 of the up to $2500 credit) is very difficult for a student under the age of 24 to take as they must show earned income enough to be provide for 50% of their own support to be eligible for the refundable part of the credit. We just take the credit and give our daughter the money to cover her taxes.</p>