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October 24, 2024
Solved

Turbotax Desktop not providing AOTC credit for my son

  • October 24, 2024
  • 2 replies
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I had included my adult son as a dependent in my return and he filed his own return, which was double dipping, so I amended my return to remove him as the dependent.

 

He is in college and had an income of $13000 and capital gains of $500 and 0 income tax. The 1098-T were in his name and was for a total of 42750. He did not have any 1098-Q.

 

When I include all of this data in his return, I expected an AOTC credit of $1000 but Turbotax says this:

 

Not eligible for credit:

 

1. Somebody can claim you a dependent

2. There is no taxable income

3. There were no net qualified education expenses

 

I made sure his return said no one can claim him as a dependent. For AOTC, there need not be any taxable income plus his education expenses were all for a bachelor's degree, enrolled full time with no drug convictions.  I created a brand new return and still have the same results, deleted the student, education section and recreated multiple times with same results.

 

What am I missing? Your suggestions are greatly appreciated.

 

Thanks

    Best answer by Bsch4477

    Your son would only be eligible for the non refundable portion of the education credit. That means that the credit is applied to his tax liability. Since he has no tax liability there is no credit. 

    If you are eligible for the credit you should claim him as a dependent and get the education credit. 

    2 replies

    tester74Author
    October 25, 2024

    I entered the same info in a competitor's product and it provides the $1000 credit. Turbo tax doesnt!

    Bsch4477Answer
    October 25, 2024

    Your son would only be eligible for the non refundable portion of the education credit. That means that the credit is applied to his tax liability. Since he has no tax liability there is no credit. 

    If you are eligible for the credit you should claim him as a dependent and get the education credit. 

    tester74Author
    October 25, 2024

    I am not eligible for the credit, so wanted to get the credit from his return. 

     

    IRS says " You can get a maximum annual credit of $2,500 per eligible student. If the credit brings the amount of tax you owe to zero, you can have 40 percent of any remaining amount of the credit (up to $1,000) refunded to you." - so shouldnt he be still getting the $1000 refund? If I enter his info in TaxAct, it does provide a $1000 refund

    October 25, 2024

    Read about the refundable part of the credit on page 21. He is not eligible for that part of the credit. And the non refundable part doesn’t help him since he has no tax liability. 
    https://www.irs.gov/pub/irs-pdf/p970.pdf