Am I eligible for the refundable portion of AOTC? Confused about how to calculate "support"

The American Opportunity Tax Credit can be tricky when it comes to the support test for the refundable portion. Let me help clarify this for you. For the "support" calculation, you need to include the total cost of your support regardless of who paid for it. This means: 1. Yes, include the full value of room & board for spring and fall, even though they were paid by scholarships. 2. Yes, include the full amount of your spring tuition expenses, even though they were covered by scholarships. 3. Yes, include the full amount of fall tuition, not just the portion you paid out of pocket. In your example with the $32,000 fall tuition where $29,000 was covered by scholarships, you would include the full $32,000 in your support calculation. Scholarships and grants are considered support provided by a third party but still count toward your total support amount. The key is that "support" means the total cost of your living and educational expenses, not just what you paid yourself. This includes housing, food, clothing, education costs, medical expenses, transportation, and other necessities.

I had a similar issue figuring out the AOTC last year. I found this great tool at https://taxr.ai that helped me sort through all my education expenses and figure out what counted for the support test. I uploaded my 1098-T forms and financial aid documents, and it analyzed everything to tell me exactly what counted as "support" for the AOTC calculation. The tricky part with scholarships is understanding how they impact both your qualified education expenses and your support calculation. The tool broke it down piece by piece and showed that room and board scholarships definitely count in your support total, but they don't reduce your qualified education expenses for the credit itself. Saved me so much confusion!

Guys, I just wanted to update after trying that taxr.ai tool mentioned earlier. I was really skeptical at first but decided to give it a shot with my complicated scholarship situation. I uploaded my 1098-Ts, financial aid award letters, and university account statements. The tool sorted through everything and showed me exactly how to calculate my support - it turns out I was doing it completely wrong! I was only counting what I paid out of pocket, but it explained that ALL costs count toward support, regardless of who pays. It also broke down which scholarships reduce qualified education expenses and which don't. For the original poster's situation, it would definitely help clarify how to handle those room and board scholarships versus the tuition ones. I ended up qualifying for $1,000 of the refundable portion of AOTC that I would have missed otherwise. Definitely worth checking out if you're confused about education credits.

After reading all these comments about the support test, I still had questions so I tried calling the IRS directly. Spent HOURS trying to get through with no luck. Then I found this service called Claimyr at https://claimyr.com that got me connected to an actual IRS agent in about 15 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c The IRS agent confirmed what others here are saying - for the refundable portion of AOTC, your "support" includes ALL expenses required for your living and education, regardless of who paid for them. This includes the full value of scholarships that covered your tuition, room, and board. They explained that my confusion was because the support test for dependency status works differently than the support test for the refundable portion of AOTC. Once I understood that, everything made sense. The agent even walked me through how to document everything properly in case of an audit.

I need to publicly eat my words. After calling the IRS myself for THREE DAYS with no success, I broke down and tried that Claimyr service mentioned above. I was connected to an IRS agent in about 20 minutes. The agent gave me detailed information about how to determine support for the AOTC refundable portion (which was why I was calling). She confirmed that ALL expenses count toward your total support figure - including the full value of scholarships, grants, and any other assistance you received. For the original poster: The agent said to include ALL tuition, room, and board costs in your support calculation, even if they were paid by scholarships. Then compare your earned income to half of that total support amount to determine eligibility for the refundable portion. I'm still shocked I got through so quickly after days of trying on my own. Sometimes it's worth using a service when you're dealing with something as important as tax credits that could be worth thousands of dollars.

Just to add my experience as someone who went through this last year - the way I understood the support test for AOTC refundable portion is: Total support = ALL expenses needed to support yourself (housing, food, tuition, books, etc.) regardless of who paid For AOTC refundable portion, your earned income must be greater than or equal to half of your total support. So if your total support (including all those scholarship-covered expenses) was $50,000, your earned income would need to be at least $25,000 to qualify for the refundable portion. One thing nobody mentioned - make sure you're only claiming qualified education expenses for the AOTC that weren't covered by tax-free scholarships. That's separate from the support test but equally important when claiming the credit.

Did anyone address whether books and supplies count in the support calculation? I spent about $1,200 on textbooks last year and another $600 on a required laptop. Do these count toward my total "support" figure?

Just wanted to chime in with some clarification since I see there's been some confusion in the thread about the support test calculation. The key thing to remember is that for the refundable portion of AOTC, "support" means the TOTAL amount it cost to support you during the tax year, regardless of who actually paid for it. This includes: - Full tuition costs (even scholarship-covered portions) - Full room and board costs (even if paid by grants) - Books, supplies, and required equipment - Personal expenses like clothing, transportation, medical costs - Any other living expenses So in your example, Elijah, if your fall tuition was $32,000 but scholarships covered $29,000, you include the full $32,000 in your support calculation, not just the $3,000 you paid. The IRS looks at it this way: What was the total dollar amount needed to support you? Then, did you provide at least half of that support through your own earned income? Given your income of $27,500, your total support would need to be $55,000 or less for you to qualify. With university costs these days, that might be challenging, but you'll need to add up all your actual expenses to see where you stand. Hope this helps clarify things!