Yes, you may be able to claim an education credit for your child attending college, provided you meet the eligibility requirements for either the American Opportunity Credit or the Lifetime Learning Credit, as outlined in Form 8863 for tax year 2025.
Eligibility Requirements
- Student Status: Your child must be enrolled at or attending an eligible educational institution (postsecondary). The academic period must begin in 2025 or in the first 3 months of 2026.
- Dependent Claim: If you claim your child as a dependent on your tax return, you are treated as having paid any qualified education expenses, even if a third party (such as a relative) paid them. Only you can claim the credit for your dependent child.
- Income Limits: The credit is phased out based on your Modified Adjusted Gross Income (MAGI). You cannot claim the credit if your MAGI is $90,000 or more ($180,000 or more if married filing jointly).
- Exclusions: You cannot claim the credit if you are claimed as a dependent on someone else’s return, if you file married filing separately, or if your child has not been issued a TIN by the due date of their 2025 return (including extensions).
Types of Education Credits
- American Opportunity Credit (AOC): Up to $2,500 per eligible student. It is partially refundable and based on 100% of the first $2,000 and 25% of the next $2,000 of adjusted qualified education expenses.
- Lifetime Learning Credit (LLC): Up to $2,000 per return (20% of adjusted qualified education expenses, capped at $10,000). This credit is nonrefundable.
Important Considerations
- Form 1098-T Requirement: The student must receive Form 1098-T from the educational institution, unless an exception applies (e.g., student is a qualified nonresident alien or expenses were paid entirely with scholarships). If no Form 1098-T is received, you must request it from the institution after January 31, 2026, and cooperate with their efforts to provide it.
- Adjusted Qualified Expenses: Expenses must be reduced by any tax-free scholarships or grants (e.g., Pell grants) to determine adjusted qualified education expenses. For example, if a Pell grant covers $5,000 of tuition and you paid $1,250, your adjusted expenses are $0, resulting in no credit.
- Refunds and Recalculation: If a refund is received after filing (e.g., due to course withdrawal), you must refigure your credit using the reduced expense amount and may owe additional tax on your next return.
Source:
Form 8863 Instructions for 2025
Disclaimer: Always verify eligibility and requirements with the current IRS Form 8863 instructions and relevant IRS publications. For complex situations, consult a tax professional or CPA.