AOTC 4th Year

[Randall]

Parents claimed the AOTC for 3 years.  The 4th year, sold rental property, big gain, income too high to claim AOTC the 4th year.  Now 5th year, daughter/student had one semester in school, earned too much to be dependent of parents.  Can daughter claim the AOTC in this 5th year?  Parents were eligible to claim AOTC the 4th year but couldn't because of income being too high.  Does that 4th year count as four years of AOTC or can daughter now claim the 4th year of AOTC since it was actually only taken 3 years?

[Abby Normal]

There's no earnings test for qualifying child, and a student who attends one semester of school, is still a qualifying child, but then it comes down to the 'half of support' test. https://www.irs.gov/publications/p501#en_US_2021_publink1000220887

And, yes, if AOTC has only been claimed for 3 years, it can be claimed one more time.

[Randall]

Thanks.  I think she's well above the half of support test.  I was just curious about that 4th year.  If parents could have claimed it but was stopped out because of income, was the 4th year still available to someone (parents or child), all other things qualifying.

[Dave T]

Also, if the student is under 24 years old they wouldn't get the refundable credit component I believe.

[Pacun]

1 hour ago, Dave T said:

Also, if the student is under 24 years old they wouldn't get the refundable credit component I believe.

Yes, they do. Just read the instructions carefully and see if they qualify for the refundable portion.

Also, please make sure student is not full time graduate student. That will eliminate AOC.

[Lee B]

"Not have finished the first four years of higher education at the beginning of the tax year.

[BulldogTom]

11 hours ago, cbslee said:

"Not have finished the first four years of higher education at the beginning of the tax year.

Even if it takes 6 years to get the 4th year completed (not uncommon).  I often advise parents of children going into Community College to "wait and see" on the first year of schooling.   See if the kid sticks it out and what school they end up transferring to.   In my experience, most kids who transfer out of a CC to a University take more than 8 semesters to get their degree.

You only get AOTC in 4 of the years.  

Tom
Longview, TX