re: American Recovery & Reinvestment Act…
Can grandparents claim the $2,500 credit in addition to parents? Must the college bound child be claimed a dependent on the tax return to receive the credit?
Can grandparents claim the $2,500 credit in addition to parents? Must the college bound child be claimed a dependent on the tax return to receive the credit?
Permalink Submitted by Clyde Wolf on Fri, 2009-08-21 00:27
The ARRA made some tempory changes to the HOPE Tax Credit increasing the credit, adding items to the eligible expenses list, and making the credit available for 4 years.
To be eligible, student can be you, your spouse if filing MFJ, or your dependent for whom you claim a personal exeption on your tax retrun. You will have needed to pay eligible expenses for this student.
Watch the IRS web site for changes to Pub 970, Tax Benefits for Education. The pub will be udpated later this year.
Permalink Submitted by Edward Czapor on Fri, 2009-08-21 03:51
For parents or grandparents to claim the credit, the student would have to qualify as a dependent, and be claimed as a dependent on the return. It does not matter who actually paid the qualified expenses, parents, student , or grandparent. The student can claim the credit on their own return even if they could be claimed as a dependent by someone else, but were not actually claimed on that return. Such a strategy is sometimes advantageous where a parent does not claim the exemption to allow the student to claim the credit. In that situation the student still cannot claim their own exemption because they could have been claimed by the parents.