Why student get Refundable American Opportunity credit when his earned income is only $800

Forum|Forum|6 years ago
May 31, 2020
4 replies
24 views

Hi,

Parents AGI over $180k, no educational credits is allowed.

Dependent (full time Student) earned income (W2 ) is only $800, tried on parents return did not claim the depend, let the student claim himself.

Why the system let the student get the $1000 refundable ( of American Opportunity credit) plus his small Fed WH.

The student's earned income is less than half of his support.

Is this correct?

Thanks!

ProConnect Tax Online

This topic has been closed for replies.

Best answer by skyworks

"In a difference case: Another 20yrs old student whose earned income higher and withholding tax is over $3k, so he is getting refund of $2500 credit refunded."

Same question - could the 20 year old student be claimed as a dependent?

yes the student cab be claimed as dependent. And I selected the Dependancy Status - Can be claimed as dependent.

qbteachmt

Level 15

Read this topic:

https://www.irs.gov/newsroom/american-opportunity-tax-credit-questions-and-answers

Especially pay attention to question 4.

Don't yell at us; we're volunteers

T

TaxGuyBill

Level 15

No, it is not correct (assuming the child is a full-time student under age 24 and the student is not filing as MFJ).

As for how to 'fix' it in PTO, you'll need to look around or wait until somebody that knows PTO comes by.

@skyworks wrote:
did not claim the depend, let the student claim himself.

No. If the somebody is ELIGIBLE to claim the student, the student can NOT "claim himself". He must indicate that he CAN be claimed. There should be another option to say that although he CAN be claimed, nobody is actually claiming him (which will allow the student to claim the non-refundable part of the credit). When you fix that, that MIGHT also 'fix' things with the American Opportunity Credit.

S

skyworksAuthor

Level 5

Hi you are right,

The student is 19 yrs old and full time student.

The Dependency Status field was left blank - the system must acting as the student can claim himself.

In a difference case: Another 20yrs old student whose earned income higher and withholding tax is over $3k, so he is getting refund of $2500 credit refunded.