<p>^^^^Hence my whining :rolleyes:</p>
<p>3bm103 - it doesn’t matter who paid for the books. if the child pays for the books the parent can claim the tax credit. I don’t think it matters if the child used income from working or a taxable scholarship. IF the scholarship paid for the books then you can’t declare them as a qualifying expense, but that is not what I read.</p>
<p>I don’t think either taxcut or turbo tax necessarily handle 1098-T’s correctly. You can do the calculations yourself by adding the qualifying expenses that you and your child paid for over and above scholarships. Room and board is not a qualifying expense for AO - books are a qualifying expense. If your child is your dependent and he got scholarships to pay for tuition, room and board then you can declare the books as a qualifying expense. On TaxCut there is a separate box to enter this number - after the questionnaire asks about 1098T figures.</p>
<p>also - if swimcatsmom’s d did provide more than half her support she can file independent. Hence my recommendation to do the math. The daughter adds her income from working plus any loans she takes out in her name. That is what she provided toward her own support.</p>
<p>justamom - the problem is that the rules for filing taxes not as a dependent and those for being able to claim the refundable part of the AO are not the same. A student cannot be claimed as a dependent if they provided > 50% of their own support. This support can be from income, savings, loans. To claim the refundable portion of the AO a student under the age of 24 cannot have *earned *income that is less than 50% of their support. So a student could have provided more than half their own support, but not be eligible for the refundable part of the AO because part of that support was not from earned income. </p>
<p>For instance say my daughters total costs for the year were $20,000 and she provided $11,000 of that. She could not be claimed as our dependent and so would claim her own exemption on her taxes because she provided >50% of her support. If the $11,000 was from earned income in 2009 then she would be eligible for the refundable AO credit because her earned income was not less than 50% of her support. But if only $5000 was from earned income and the other $6,000 was from savings or a loan then she would not be eligible for the refundable credit because her earned income is less than 50% of her support.</p>
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<p>^
Ohhhhhhh yeah. Good point. That is idiotic.</p>
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Agreed that the parent takes the credit and that the books count toward the credit. But the question was that if the student had taxable scholarship income, could she use the books as a credit ON HER RETURN to offset the tax. The answer is still no.</p>
<p>Is unemployment income considered earned for providing more than half their support? </p>
<p>And, can you clarify again are loans taken in the student names considered toward their support?</p>
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I would not think it would be considered earned income as it isn’t earned income. It is not included in the list of earned income examples.
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When I was searching on the internet for clarification about how to treat certain grants/scholarships I came across a couple of CPA forums where they said that a Student’s loan is considered part of their support and can push them over the >50% for tax filing (not for the refundable AO credit). I was surprised to read that. It seems like another one of those vague things that may be open to interpretation. IRS 970 does not specifically address it. It does say that scholarships are not included in the >50% support. You would probably have to ask a CPA for an answer. Though from reading some of the forums you may get one answer from one CPA, and a different one from another.</p>