D16 took 2 classes this last calendar year at a cost of 1200. She has enough in her 529 plan that with scholarships I may pay very little out of pocket. And my understanding is the AOTC might not extend past 2017? I know I should ask my tax adviser, just curious on opinions.
Too many details not given to offer a real opinion. If there’s that much in 529 money then it may not be worth waiting to use it and yes, it may not extend though I’d guess it will. It will be very unpopular not to extend it.
Just like making additional scholarships/grants taxable for the purpose of taking the AOTC, it is possible to make the earnings portion of 529 distributions taxable so you can use those expenses for the AOTC. So that’s something to play around with to see how it works best in future years. May depend on how well the 529 investments did.
I don’t know if D16 means age 16 or a graduation year. Are the two classes she took leading to a degree, certificate or other recognized educational credential? Were the 2 classes considered at least 1/2 normal full-time for her course of study?
Chapter 2 of Pub 970, page 10 has the requirements.
16 is both the age and the year of graduation. They were classes she took to get a “head start”. No she was not half time and was non-matriculated. I didn’t know it made a difference. I will check the site. Thank you
In order to be eligible for the AOTC, a student must be enrolled in a program that leads to a degree, certificate, or other recognized educational credential and must carry at least one-half the normal full-time workload for his or her course of study.
Two other places where this might be able to be used on Form 1040 are Line 34 Tuition and fees (attach Form 8917)
or as a Lifetime Learning Credit on Line 50 Education credits (attach Form 8863).
Yes, I was also trying to find out if any of the education credits were able to be used for the amount we paid for a dual enrollment class. But from what I’ve read it’s supposed to be degree-seeking and post-secondary and I’m not sure where I read that the student has to have a GED or high school diploma? So I’ve concluded that we don’t qualify for any of these credits and we did not claim them.
Do a search for posts here for "lifetime learning credit"with me as the author. You can use it for dual enrollment courses (but NOT the AOTC)