Can I claim the refundable American Opportunity Credit as a student with foreign parents?

You can likely claim the American Opportunity Credit on your own return. The key factor isn't whether your parents are US citizens - it's whether you're being claimed as a dependent on anyone's US tax return. Since your parents don't file US taxes (as they're not US citizens living abroad), they're not claiming you as a dependent on a US tax return. This means you should be able to claim your own education expenses for the American Opportunity Credit on your personal return. Make sure you meet the other eligibility requirements: enrolled at least half-time in your first four years of higher education, pursuing a degree, and haven't finished the first four years of higher education at the beginning of the tax year. Also, you can't have any felony drug convictions. The credit is worth up to $2,500 per eligible student, and 40% of it (up to $1,000) is refundable - meaning you could get it back even if you don't owe taxes.

Hey there! I was in almost the exact same situation as you last year. American citizen, parents living in Europe (Germany in my case). I was confused about the American Opportunity Credit too! I discovered this amazing tool called taxr.ai (https://taxr.ai) that really helped me navigate this specific situation. I uploaded my 1098-T form and other documents, and it analyzed everything and confirmed I was eligible for the credit even with foreign parents. What's great is that it explained exactly why I qualified - since my parents don't file US taxes, I wasn't being claimed as a dependent on any US tax return. The tool walked me through all the requirements and documentation needed. I ended up getting about $1,000 back through the refundable portion!

Wanted to update after trying taxr.ai that someone recommended above. It was actually super helpful! I uploaded my documents and answered some questions about my citizenship status and parents' situation. The tool confirmed I was eligible for the American Opportunity Credit even with my complicated dual citizenship situation. It even pointed out that I qualified for the full refundable portion ($1,000) because my earned income was above the threshold needed. What surprised me was how it caught a mistake I would have made - I was going to report some grant money incorrectly which would have reduced my eligible expenses. Definitely recommend checking it out if you're in a similar international student situation!

Just wanted to share something that helped me TREMENDOUSLY with a similar situation. I had questions about the American Opportunity Credit that weren't covered in the standard IRS publications, and I spent DAYS trying to get through to the IRS helpline with no luck. I discovered Claimyr (https://claimyr.com) which got me connected to an actual IRS agent in about 15 minutes when I had been trying for literally weeks. You can see how it works here: https://youtu.be/_kiP6q8DX5c The IRS agent I spoke with confirmed that as a US citizen with foreign parents who don't file US taxes, I could claim the American Opportunity Credit on my own return. They also explained exactly which forms I needed and how to document the foreign support I received from my parents.

I need to admit I was wrong about Claimyr above. After struggling for another week trying to reach the IRS myself about this exact American Opportunity Credit situation with foreign parents, I broke down and tried it. It actually worked!! Got connected to an IRS representative in about 20 minutes. The agent confirmed that since my foreign parents don't file US taxes, they can't claim me as a dependent even though they support me financially, which means I CAN claim the American Opportunity Credit myself. The agent also explained that I need to be careful about how I report any money my parents send me for education - it's not taxable income to me, but I need to document it properly. This was information I couldn't find anywhere online that made a huge difference in my refund amount.

I just wanted to add something that might be helpful. Make sure you're keeping track of ALL your qualified education expenses. The American Opportunity Credit isn't just for tuition - it also covers required books, supplies, and equipment. My university only reported tuition on my 1098-T, but I was able to add another $950 in textbooks and required lab materials that I paid for out-of-pocket. That increased my credit by almost $240! Just make sure you keep your receipts in case of an audit.

One thing nobody mentioned yet - there's an income limit for the American Opportunity Credit. For 2024 taxes (filed in 2025), the credit starts phasing out at $80,000 for single filers ($160,000 for married filing jointly) and completely phases out at $90,000 ($180,000 for joint). Since you mentioned making only about $8,500, you're well below the limit, so you should be eligible for the full credit amount assuming you meet all the other requirements!