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A dependent is a person other than the taxpayer or spouse who is related to the taxpayer by blood, marriage, or adoption.
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Introduction
If you have a dependent attending college, you may be able to take advantage of federal education tax credits. The American Opportunity Tax Credit and the Lifetime Learning Credit can help offset the costs of tuition, fees and other related expenses.
To claim either credit, you must file a federal income tax return. The student must also meet certain criteria, such as being enrolled in a degree or certificate program at an eligible institution.
The American Opportunity Tax Credit is worth up to $2,500 per eligible student. To claim this credit, the student must be enrolled in at least half-time status for at least one academic period during the tax year. Additionally, the student cannot have been convicted of a felony drug offense.
The Lifetime Learning Credit is worth up to $2,000 per eligible student. There is no requirement that the student be enrolled in a degree or certificate program, and there is no minimum enrollment period. However, the credit is only available for courses taken to acquire or improve job skills.
What is the American Opportunity Tax Credit?
The American Opportunity Tax Credit is a tax credit for qualified education expenses paid for an eligible student. The credit is worth up to $2,500 per eligible student. To claim the credit, you must fill out Form 8863 and file it with your tax return.
To be eligible for the American Opportunity Tax Credit, you must:
– Be claiming the credit for an eligible student. An eligible student is someone who is enrolled at least half-time in a program leading to a degree, certificate, or other recognized educational credential at an eligible educational institution.
– Have not completed the first four years of post-secondary education before the start of the tax year.
– Not have been convicted of a felony drug offense.
If you’re married and filing a joint return, only one of you can claim the credit for each eligible student. You can’t claim the credit if someone else claims you as a dependent on their tax return.
Who is Eligible for the AOTC?
You may claim the AOTC for an eligible student who:
– Is enrolled at least half-time for one academic period (semester, trimester, or quarter) beginning in the tax year
– Has not completed the first four years of postsecondary education as of the beginning of that academic period
– Is pursuing a program leading to a degree, certificate, or other recognized educational credential
– Is not carrying a course load considered by the educational institution attending to be sufficient for full-time status
How to Claim the AOTC
To claim the AOTC, you’ll need to file Form 8863 with your tax return. You’ll need to provide information about the eligible students, including their names, Social Security numbers, and the amount of qualifying expenses paid. You’ll also need to provide information about the educational institution, such as the name and address of the school.
If you’re claiming the AOTC for more than one student, you’ll need to complete a separate Form 8863 for each student.
What is the Lifetime Learning Credit?
The Lifetime Learning Credit is a federal tax credit that can be claimed for educational expenses incurred by an eligible student. The credit is worth up to $2,000 per eligible student, and can be claimed for tuition, fees, and other eligible expenses incurred at an eligible educational institution. To be eligible for the credit, the student must be enrolled in an eligible educational program on at least a half-time basis. Additionally, the student must not have completed the first four years of post-secondary education as of the beginning of the tax year.
Who is Eligible for the LLC?
To be eligible for the LLC, the student must:
-be enrolled in an eligible educational institution
-be pursuing a degree or other recognized education credential
-have completed at least half of the academic period for which they are enrolled (measured in credit hours or equivalent clock hours)
-not have been convicted of a felony drug offense
How to Claim the LLC
If you paid qualified education expenses for your dependent, you may be able to claim an education credit on your federal income tax return. The credit can help offset the cost of tuition, fees, and other eligible expenses.
To claim the LLC, you must complete Form 8863 and attach it to your tax return. You’ll need to provide information about the student, the educational institution, and the expenses you paid.
If you’re claiming the credit for more than one student, you’ll need to complete a separate Form 8863 for each student.
For more information about claiming the education credits, please see Publication 970: Tax Benefits for Education.
Conclusion
In conclusion, you can claim education credits for your dependents if they meet certain criteria. These include being enrolled in an eligible educational institution, being enrolled in a degree or certificate program, and being a full-time student. There are also limits on the amount of money you can receive in tax credits, so be sure to check with the IRS before claiming any education credits for your dependents.
