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Tuition Expense & Education Credits

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    #1

    Tuition Expense & Education Credits

    My clients are mostly old (as am I) so I almost never deal with this issue.
    Mom & Dad (MFJ) with $201-K AGI have 2 kids aged 21 & 23. Both apparently still live at home but each are away at school and in the 1st 4 years of undergrad.
    Although each kid had 2024 W-2 earnings of about $14-k or so, Mom & Dad provided more than 1/2 of their support and will claim each child for the $500 CTC.
    As I understand this, none of these people will have access to either Education credits or tuition deduction. Do I mis-understand how this works?
    Thanks for comments.
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    #2
    Originally posted by RWG1950 View Post
    Mom & Dad (MFJ) with $201-K AGI have 2 kids aged 21 & 23. Both apparently still live at home but each are away at school and in the 1st 4 years of undergrad.
    Although each kid had 2024 W-2 earnings of about $14-k or so, Mom & Dad provided more than 1/2 of their support and will claim each child for the $500 CTC.. Do I mis-understand how this works?
    Thanks for comments.
    Presuming you claim these kids as "qualifying child", you have the support test backwards. The test is "Did the child provide more than half their support?"

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      #3
      The tuition deduction was repealed in 2021, so forget about that.

      The standard deduction pretty much offsets the kids earned income, so unless they had other income creating a tax liability, the non-refundable AOTC will not help them. They are also not eligible for the refundable credit because their earned income is not more than half of their own support

      Perhaps the support test being referenced here is the one for the refundable portion, which is indeed whether or not the student pays more than half their own support from earned income.

      "You said it, they'll never know the difference. Come on, we'll paint our way out!" - Moe Howard
      "That's enough! When you didn't know what you were talking about, you really had something! [to Curly]" -Moe Howard      ​

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        #4
        It can be hard for TP: to say they provide more than half of college children's support. either way you ask did you provide more than half or did child provide more than half. Answer is same. I always have Client fill out this great worksheet from IRS.

        chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://apps.irs.gov/app/vita/content/globalmedia/teacher/worksheet_for_determining_support_4012.pdf

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