<p>If she only made 5K this year (and it was all wages), then she will not have any tax liability and therefore she will not get any benefit from the tuition tax credits.</p>
<p>The parent who claims her as a dependent on his/her return is the one who gets to claim the associated college tuition credits (as well as other tax benefits associated with her, such as the dependency exemption and possibly Head of Household filing status as well.)</p>
<p>There are maximum income limits for claiming tuition tax credits, so it’s possible that one or both parents may make too much money to qualify.</p>
<p>Here’s a link to definitive information about education tax benefits (including examples) from the IRS:</p>
<p>[Publication</a> 970 (2007), Tax Benefits for Education](<a href=“http://www.irs.gov/publications/p970/]Publication”>http://www.irs.gov/publications/p970/)</p>
<p>In general, it will not bring up red flags for a student to claim the benefits AS LONG AS nobody else claims her as a dependent on their return. The IRS recognizes it as a perfectly legitimate thing to do–if both parents forego claiming a student on their return, the student may claim the education tax credits for tuition paid to the college, no matter who actually paid that tuition (mom, dad, grandma, uncle, family friend, godfather, etc.) (Exception: if tuition was paid by an employer as a fringe benefit for the child or the parent, that would not qualify for tuition tax credits. Also, tuition paid by scholarships or grants does not count toward the credit, of course.)</p>
<p>Note that even if both parents forego claiming a child that they are entitled to claim on their returns, that child may still NOT claim her own personal exemption, but she may claim the tuition tax credits.</p>
<p>However, all of this is moot for your daughter this year–since she should not owe taxes on 5K of earned income, and thus will not benefit from Federal tuition tax credit.</p>
<p>(State tuition tax credits are a whole other kettle of fish. I’d advice going to your state tax department website and reading the fine print carefully. Many tax professionals and financial aid professionals are confused about these details.)</p>