New guy comes in for tax prep, he attends college full-time, has no earned income, pays his tuition with student loans and lives on the balance of the student loans. He is 25 yoa and lives with wife who doesn't work either (part-time grad student). Looks like he gets the refundable education credit even with no earned income. Software says he does but seems not quite right, am I missing something that says no refund?
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"A man that holds a cat by the tail learns something he can learn no other way." - Mark Twain -
Yup, if he meets general requirements for the AOC.
He's too old for the kiddie tax limitations to come into play, and it is these that restrict eligibility for the refundable credit.Evan Appelman, EA -
Living on balance of Student Loans
Married couple living from the balance of student loans smells fishy to me and probably to the IRS, I would'nt sign that return...Comment
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I imagine living off student loans is more common than most realize. Makes you wonder how many 22 year old students being claimed as dependents were actually providing over half their support with loans.Comment
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