It is also possible for students to benefit from the AOTC themselves, sometimes it is not refundable but can still reduce taxes owed. Mine had paid coop/internships and contributed to their education expenses.
According to the IRS link above, even students that provide less than half their support can qualify. This was the result I got from the IRS link above when going through the prompts for a full-time student that contributes (could be a loan) to their qualified education expenses. It didn’t ask about parent incomes, but I did put in not claimed on anyone else’s return:
Am I eligible to claim an education credit?
You are eligible to claim the American Opportunity Credit.
However, you cannot claim any part of the American Opportunity Credit as a refundable credit on your tax return since:
- you were over age 18 and under age 24 at the end of 2022,
- you were a full-time student,
- your earned income was less than one-half of your support,
- at least one of your parents was alive at the end of 2022, and
- you are not filing a joint return.
Instead, your allowed credit will be used to reduce your tax as a non-refundable credit only.
You can claim qualified education expenses which are:
- Tuition,
- Expenses for course-related books, supplies, and equipment that the student needs for a course whether or not the materials are bought at the educational institution as a condition of enrollment or attendance, and
- Student-activity fees that must be paid to the institution as a condition of enrollment or attendance
You are eligible to claim the Lifetime Learning Credit.
You can claim qualified education expenses which are:
- Tuition,
- Expenses for course-related books, supplies, and equipment that must be paid to the institution as a condition of enrollment or attendance, and
- Student-activity fees that must be paid to the institution as a condition of enrollment or attendance
If you choose to claim the Lifetime Learning Credit, your credit is limited by your tax liability and other non-refundable credits.
How do I claim the credit?
As you qualify to claim more than one education benefit, you must choose which education benefit to claim.
Complete Form 8863, Education Credits, to calculate the education credit and attach it to your tax return.