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AOC


Christian

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A nephew has a son who is a late(very) bloomer.  He turns 24 this year(2018), lives at home, and is a full time student and has no income only support from his parents. They have taken the AOC for two years and could have taken it for two more years but as noted he turns 24 this year. The fact he is now 24 and not disabled in any way disqualifies him as being their dependent so they loose the AOC. My next thought was he may claim it but unless he has taxable income I see no way he can use it. As you can see  I am basically casting about for anyway I can to help my sister's boy with that kid of his but frankly I cannot come up with any scenario other than the one described. The kid has no income so he would need a part time job in order to have any taxable income in order to use the credit which is my reading of the law. Should any of you see any other way around this please advise. Before giving my nephew the good news for 2018 I thought I would pass this along for group discussion. :unsure:

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A qualifying child must be younger than age 19 at the end of the year or younger than 24 and a full-time student. Since your son has already turned 24, he is no longer considered a qualifying child. ... As a qualifying relative, your child can be older than 24 and still be claimed as your dependent.Feb 5, 2013

Thanks to both of you. Andrew will not be younger than 24 on 12/31/18. He will remain a full time student. I'll check to see if he can get dependency as a qualifying relative. If so we still have the question if the AOC applies to a qualifying relative. :(

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I was thinking that as well cbslee. If he works some he can claim the AOC. I am reasonably sure he will qualify as a dependent relative so that saves the exemption for his dad. I am less sure his dad can still use the AOC on his return and cannot find the section dealing with this aspect of this as yet.:(

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From your details, it appears that he is a qualifying relative and the parents are entitled to the dependency exemption and also the AOC.  Pub 970 states :

    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.
 
It does not distinguish qualifying child vs. qualifying relative.
If the parents' income is too high for them to receive the credit (over $180,000)  then you could consider having the student file and claim the refundable portion,  He can only do this if the parents do not claim him and he does not claim himself.
 
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14 hours ago, Hahn1040 said:
If the parents' income is too high for them to receive the credit (over $180,000)  then you could consider having the student file and claim the refundable portion,  He can only do this if the parents do not claim him and he does not claim himself.
 

I thought that he could only do this if the parents CAN NOT claim him, regardless of whether they do.  And if he has no income and fully relies on their support, they can claim him. 

Just out of curiosity, in 2018 when there are no dependency exemptions, will the situation be different?

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Hahn 1040, that's the general rule for the AOC BUT there is a special rule for students under 24 claiming the refundable portion on their own return.

AGE has nothing to do with AOC and the credit goes with the personal exemption (I won't be able to say that next year).

So... my son is 40 years old, a high school drop out and decides to stop working almost completely, gets his GED and starts college full time. He lives with me and I support him (actually his only income is a W-2 for $3,000 each year for the next 4 years) and I will provide 60% of his support. Based on the rules in effect today, I should be able to claim the non-refundable and refundable portion of the credit.

************************ *************************** End of statement *****************************************************************************************************

I will qualify for credit even if I provide 11% of his support, my ex provides 25%, my daughter provides 15% of support for his brother, and my dependent provides 49% of his own support. PROVIDED every year, my ex and my daughter and I agree that I am going to claim him each year and I have a written note each year for the next 4 years.

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