Questions about Tax Credit for college

[ColoradoMom!!]

I've been reading a bit about this and still have a few questions, and I know some of you have been down this road already.

One article I read mentioned that 40% of the credit can be recovered if your tax liability is 0. What if you are due a refund? Will you get the entire credit back?

Probably my most stupid basic question, but as a parent, do I apply for this credit for my current 18 year old freshman on my return, or is it reflected in his own tax return?

We didn't take out any student loans thus far. Thanks!

 

[riley2008]

I've been reading a bit about this and still have a few questions, and I know some of you have been down this road already.

One article I read mentioned that 40% of the credit can be recovered if your tax liability is 0. What if you are due a refund? Will you get the entire credit back?Being due a refund and having a lax liability of zero are two different things. No tax liability means your effective tax rate is 0% - you will pay nothing to the government (if you did pay you get a refund of what you paid in). YOu may also get a refund if your tax liability is higher but you just paid too much.

Probably my most stupid basic question, but as a parent, do I apply for this credit for my current 18 year old freshman on my return, or is it reflected in his own tax return?
If you paid, then you claim. You also claim your 18yo as a dependent.

We didn't take out any student loans thus far. Thanks!

My answers in blue - Hope that helps.

 

[ColoradoMom!!]

Thanks for your help! Yes, I did realize that 0 tax liability and receiving a refund are two different things - I should have worded that differently - I was just worried that you wouldn't get 100% of your refund if you were due a refund at all - but it doesn't make sense that you wouldn't - but sometimes the rules don't make sense.

Ahhhh - yes that is what I was hoping - we claim, we pay, we apply for the tax credit.

Thanks for taking the time to answer my questions!!