Your Money: Grandparents pay for college, but tax credits for costs are not a …
Article from The Star-Ledger:
Q. We are the grandparents of a college student and we’re his sole support for all college expenses. His parents claim him as a dependent on their IRS forms, but not for school. Can we deduct his first three years for these expenses? We are senior citizens who are currently on Social Security and pensions.
— Gma and Gpa
A. Based on what you’ve described, you’re probably out of luck.
If you are paying someone’s college costs, there are certain credits that you may be eligible to take, said Bernie Kiely, a certified financial planner and certified public accountant with Kiely Capital Management in Morristown.
There is the American Opportunity Credit and the Lifetime Learning Credit. Kiely said you may claim an education credit if you, your spouse or a dependent you claim on your tax return was a student enrolled at or attending an eligible educational institution.
The problem is you are not claiming your grandchild as a dependent, his parents are.
One of the five tests to claim a person as a dependent on your tax return is the support test, he said.
“This test requires you to provide more than 50 percent of a person’s support — food…………………continues on The Star-Ledger
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