I claim my daughter who is a full time college student out of state. She received a partial scholarship as well as financial aid. The balance of her tuition was paid by myself, as well as other family pitching in. Am I able to claim the educational expenses (file the 1098t) even if I did not pay 100% of the remainder of her tuition?=====> paying for your child?s College tuition is deductible. she should also receive a Form 1098-T, which reports the amount of qualified education expenses paid by the student or you during the tax year of 2016. Educational institutions you paid tuition to should send you this form by Jan 31
In order to claim an education tax credit you must be paying the expenses for your dependent. You cannot claim a credit for education expenses paid with tax-free funds. You must reduce the amount of expenses paid with tax-free grants, scholarships and fellowships and other tax-free education help.You can?t claim both the American Opportunity credit and the Lifetime Learning credit for the same student for the same yearThe IRS makes no exception for children who cannot be claimed as a dependent for one reason or another. In the case of the tuition and fees deduction, if you pay for education expenses and the student is not claimed as a dependent, the deduction is lost. However, the student might be able to use the American OpportunityTax Credit
For the American Opportunity Tax Credit, Tuition and Fees Deduction and the Lifetime Learning Credit, qualifying educational expenses must be claimed by the person who gets to claim the student's exemption. If the student can't be claimed as a dependent by someone else, the student gets to claim her own exemption, and therefore gets to take the education credit. Even if someone else, such as a parent, is paying the costs directly to the school, the IRS treats the parent as making a gift to the son and then the son paying the expenses. Therefore, the son would get to take credit for the expenses paid by the parent. A scholarship is tax-free if: she is a full-time or part-time candidate for a degree at a primary, secondary or accredited post-secondary institution; The award covers tuition and fees to enroll in or attend an educational institution and covers fees, books, supplies and equipment required for your courses. American Opportunity credit is phased out if your modified adjusted gross income exceeds certain levels. (MAGI is adjusted gross income plus certain tax-free income from sources outside the US.)
? For 2016, the MAGI phase-out range for unmarried individuals is $80k to $90k
The MAGI phase-out range for married couples filing jointly is $160k to $180k.
Regardless of your income, you are not eligible if you use married filing separate status
American Opportunity credit is 40% refundable. That means a portion of the credit will be refunded to you even if you don?t owe any federal income tax.Say your American Opportunity credit is $2,500. The refundable portion is $1k ($2,500 x 40%). That amount is treated as a payment on your tax return (as if you had the $1kwithheld from your wages).
The remaining $1,500 ($2,500 x 60%) is a nonrefundable credit that provides a benefit to you only if you owe federal income taxes. If you don?t owe any federal income tax because of deductions and other credits, the entire $1k refundable credit counts as a tax overpayment and is refunded to you