John M. Hoffman & Associates CPAs

Frequently Asked Tax Questions

Education Deductions and Credits

"Who claims the credit – me or my Harvard son?"

To claim the education credit you must not be claimed as a dependent by another taxpayer. This means that if Junior is at Harvard and he wants to claim his credit against his trust fund income, Dad can not claim Junior as a dependent. We often analyze situations to determine if a larger tax benefit might exist if the parent waives the right to claim the dependency exemption. Even if the student child does not qualify to claim his own exemption, the education credit may offer greater tax benefits to the child than the dependency exemption to the parent. We urge caution in this area as we would not want parents to jeopardize their children being covered under their medical insurance policy because the parent waived the dependency exemption so the student could claim the education credit.