American Opportunity Credit

[BP.]

the requirement is that the student be at least half time (which he is . . . )

the student is not a full-time student

In defining a student's enrollment status for tax purposes, isn't "at least half time" the equivalent of "full time?"

[dtlee]

Kram's answer was succinct and to the point. In addition to meeting the criteria mentioned the tax pro has to enter or input in the information correctly in order to get the proper result.

Here is how I look at this:

The rules are as follows:

You do not qualify for a refund if items 1 (a, b, or c), 2, and 3 below apply to you.

1. You were:
   
   1. Under age 18 at the end of 2010, or
      
   2. Age 18 at the end of 2010 and your earned income (defined below) was less than one-half of your support (defined below), or
      
   3. A full-time student over age 18 and under age 24 at the end of 2010 and your earned income (defined below) was less than one-half of your support (defined below).
2. At least one of your parents was alive at the end of 2010.
   
3. You are filing a return as single, head of household, qualifying widow(er), or married filing separately for 2010.

We know that the student meets criteria 2 and 3, so if the student meets the requirement of item #1, it is three strikes and the student is out (of the refundable portion).

The student must meet a, or b, or c to lose the refundable portion. The student fails to meet a and b due to age. For c, the student must be a full-time student AND within the age bracket AND provide less than half of his support with earned income. By not meeting any one of those conditions, the student is allowed to claim the refundable portion of the credit. The original post says that the student is not a full-time student.

[dtlee]

Actually, the requirement is that the student be at least half time (which he is according to the original post). Unless the individual is disabled, the student cannot be a Qualifying Child since the student is not a full-time student and is over age 18. This student cannot be claimed as a Qualifying Relative since the income is at least $9,348 (which fails the gross income test).

Thus, there are multiple ways that this student is exempt from the Kiddie Tax rules which are used to disallow the refundable portion of the credit.

[dan doshan]

Kram's answer was succinct and to the point. In addition to meeting the criteria mentioned the tax pro has to enter or input in the information correctly in order to get the proper result.

[Kram BergGold]

many issues

First to get AOC the student has to be at least a half time student. If he is, then are parents not claiming him becasue he is providing over 1/2 of his own support or becasue they choose not to claim him. If the latter he is not eligible for the refundable part of the AOC. If the former, is his 1/2 of support coming from earned income (he gets the refundable AOC) or unearned income (he does not get refundable AOC).

[dtlee]

Obviously I am not the only one that beats myself up over the refundable portion of this credit. I have a client 20, earned income of $9,348, both parents alive,not a full time student (9 hours ea semester) single filing, parents not claiming him nor did they last year, supported more than one-half support. This is the situation my tax program is allowing the refundable portion of the credit. My collegue who has the same scenario different tax program does not qualify for the credit period. Anyone out there have any comment on this.

Although it is not likely that this is the key, the comparison is not whether they provided more than half of their own support, but whether they provided more than half of their own support through earnings. Support paid for with savings or sale of stock or retirement fund distributions or student loans would not be considered earned income.

However, to me, the key for your situation is that your student is not a full-time student and thus is eligible for the refundable portion of the credit even though he may not have supported himself at all.

Are you sure the other tax program is handling the identical situation? It could be the way it was coded since the proper checking of boxes for these credits is notoriously fraught with gotchas in every package.

[Bees Knees]

A single taxpayer under age 24 cannot get the refundable portion of the American Opportunity Credit, according to TheTaxBook on page 12-3.

[DONNA ASTON]

Obviously I am not the only one that beats myself up over the refundable portion of this credit. I have a client 20, earned income of $9,348, both parents alive,not a full time student (9 hours ea semester) single filing, parents not claiming him nor did they last year, supported more than one-half support. This is the situation my tax program is allowing the refundable portion of the credit. My collegue who has the same scenario different tax program does not qualify for the credit period. Anyone out there have any comment on this.