UGH! Yet another question about tuition and taxes

[axw]

<p>Please help me clarify who can take a tax deduction for tuition expenses. </p>

<p>Parents are divorced, and according to the legal documents, each parent takes one child as a dependent on taxes. The parents are splitting the cost of tuitition - no loans.</p>

<p>Scenario 1) Child is a dependent of the non-custodial parent. Custodial parent pays the entire tuition bill directly to the college, and is reimbursed for half of it by the non-custodial parent. Who can claim the tuition payment on their taxes?</p>

<p>Scenario 2) Child is a dependent of the custodial parent. Custodial parent pays the entire tuition bill directly to the college, and is reimbursed for half of it by the non-custodial parent. Who can claim the tuition payment on their taxes?</p>

<p>Scenario 3) Grandparent pays part of tuition directly to the college. Custodial parent pays the rest of the tuition directly to the college, and is reimbursed by the non-custodial parent for half of the part they paid (total - grandparent = X & X/2 = each parent). Who can claim the tuition payment on their taxes?</p>

<p>Scenario 4) Child is a dependent of the custodial parent. Non-custodial parent pays the entire tuition bill directly to the college, and is reimbursed for half of it by the custodial parent. Who can claim the tuition payment on their taxes?</p>

<p>Scenario 5) Child is a dependent of the non-custodial parent. Non-custodial parent pays the entire tuition bill directly to the college, and is reimbursed for half of it by the custodial parent. Who can claim the tuition payment on their taxes?</p>

<p>Don't you just love tax-time?</p>

[swimcatsmom]

<p>The only person who can take an education tax credit is the person who claims the exemption for the student on their tax return. That person is considered to have paid the expenses.</p>

<p>For instance the American Opportunity tax credit (and LLC) rules are:</p>

<p>

Who Can Claim the Credit
Generally, you can claim the American opportunity credit if all three of the following requirements are met.
• You pay qualified education expenses of higher education.
• You pay the education expenses for an eligible student.
• The eligible student is either yourself, your spouse, or a dependent for whom you claim an exemption on your tax return.
Note. Qualified education expenses paid by a dependent for whom you claim an exemption, or by a third party for that dependent, are considered paid by you.

</p>

<p>Tuition deduction is similar but has some other rules. The person has to have paid the expenses and have claimed the exemption. If you google IRS 970 and look at page 40 it will give you the rules.</p>

[axw]

<p>Thank you! We read IRS 970 over and over, and couldn’t find that!!! You really saved my sanity :)</p>