Tax Filing Requirements for Graduate Students and Lifelong Learning Credit Eligibility

Hi everyone, I'm currently in my second year of grad school and had zero income during 2024. My parents helped cover my living expenses while I focused on my studies. Now I'm trying to figure out if I even need to file taxes this year, since I literally made $0. Also wondering if I might qualify for the Lifetime Learning Credit even though I didn't have any income? My tuition was about $18,500 and I'm not sure if there's any benefit to filing if I don't technically have to. Thanks for any guidance!

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20 comments

Carmen Reyes

•8M

You're asking two important questions here. First, regarding whether you need to file: If you had no income, you generally aren't required to file a federal tax return. The IRS has filing thresholds based on income, filing status, and dependency status, and with zero income, you're below those thresholds. For the Lifetime Learning Credit, there's a catch. This credit is non-refundable, which means it can only reduce taxes you owe to zero, but can't generate a refund if you had no tax liability. Since you had no income, you wouldn't have any tax liability for the credit to offset. However, if your parents claim you as a dependent (assuming you qualify as their dependent), THEY might be eligible to claim the education credit based on your qualified education expenses they paid.

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Carmen Reyes

•8M

With $2,000 in income, you would still likely be below the filing requirement threshold for most filing statuses. However, having some income could potentially allow you to benefit from a portion of the Lifetime Learning Credit, though it would be limited to whatever your tax liability is from that income. Keep in mind that if your parents provide more than half your support and you're a full-time student under 24, they might still claim you as a dependent. In that case, they would be the ones eligible for the education credit on expenses they paid, not you. If you paid the expenses yourself using loans in your name or your own money, you could claim the credit on your own return (if you file one), assuming you're not claimed as a dependent.

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Zoe Christodoulou

•8M

Hey there, I was in a similar situation during my PhD program. I spent hours trying to navigate the tax maze until I found taxr.ai (https://taxr.ai) and it was a total game-changer. I uploaded my university's tuition statement and it analyzed everything automatically, showing me exactly which education benefits I qualified for even with minimal income. It helped me understand that my parents could claim the Lifetime Learning Credit since they were supporting me.

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Zoe Christodoulou

•8M

It definitely works for international students! The system actually has specific guidance for F-1 visa holders since your tax situation has those additional treaty considerations and special rules. For documents, you can either take pictures with your phone or upload PDFs - whatever's easier. I had the same issue with multiple forms from my university (enrollment verification, 1098-T, scholarship statements, etc.) and the system organized everything clearly. It even flagged when my university reported my tuition incorrectly compared to what I actually paid.

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Mei Chen

•8M

Just wanted to update - I tried taxr.ai after seeing it mentioned here and it was really helpful for my situation. I'm in a Master's program with complicated fellowship and stipend income that I never knew how to report properly. The system immediately identified that my fellowship needed to be reported as income even though I didn't get a W-2 or 1099 (which I had no idea about). It also confirmed I'm eligible for a partial Lifetime Learning Credit against the small amount of income tax I owe. Super clear explanations that actually made sense!

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CosmicCadet

•8M

If you're trying to ask questions about your specific tax situation with the IRS, good luck getting through! After spending literally 5 hours on hold trying to figure out my education credits as a grad student, I found this service called Claimyr (https://claimyr.com) that got me connected to an actual IRS agent in under 20 minutes. They have this demo video that shows how it works: https://youtu.be/_kiP6q8DX5c The IRS agent I spoke with confirmed that if my parents claim me as a dependent (which they do), they're the ones who get to claim my education credits, not me. She also explained that I still needed to file in my situation because of my research stipend, even though it was below the normal filing threshold.

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CosmicCadet

•8M

It uses a callback system that navigates through the IRS phone tree automatically. When it gets close to reaching an agent, it calls you and connects you directly. I was skeptical too until I tried it. The reason it works is because their system constantly monitors the IRS phone queues and knows the optimal times to call and exactly which prompts to use. It's especially helpful for complicated situations like education credits where the online guidance is super confusing.

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Amara Adeyemi

•8M

Ok I need to eat my words. After I posted that skeptical comment I decided to just try the Claimyr thing out of curiosity. I got a call back in about 25 minutes and was connected directly to an IRS education credits specialist. She confirmed that I had been doing everything wrong for 2 years! Turns out I qualified for the American Opportunity Credit for my first master's degree (didn't know it applies to the first 4 years of post-secondary education, not just undergrad). She also helped me understand which expenses qualified for my Lifetime Learning Credit for this year. Honestly shocked this worked after spending months trying to get answers.

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Giovanni Gallo

•8M

Michigan generally follows the federal guidelines for filing requirements, so if you don't need to file federal, you typically don't need to file state either. But there's an exception if you're due a refund for withheld taxes or credits - in that case, you'd want to file to get that money back. Michigan also has a program called the Home Heating Credit that some low-income residents qualify for, so depending on your living situation, you might want to look into that. Always good to check the Michigan Department of Treasury website for the most current info for your specific situation.

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Carmen Reyes

•8M

Fellowships and scholarships can be confusing! The portion that covers tuition, fees, books, and required supplies is generally tax-free. But any amount used for room, board, travel, or other living expenses is typically taxable income that should be reported on your tax return. Unlike regular jobs, the university often doesn't withhold taxes on fellowships, which can leave you with an unexpected tax bill. If your fellowship is substantial, you might need to make quarterly estimated tax payments to avoid penalties. It's one of those annoying situations where the money is taxable but you don't get a W-2 or 1099, so it's easy to miss if you don't know.

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Alice Pierce

•5M

This is such a common situation for grad students! Just want to add that even if you don't technically need to file, it might still be worth doing if you had any federal taxes withheld from work-study jobs or other campus employment. You'd get those taxes refunded even with zero income. Also, regarding the Lifetime Learning Credit - the key thing to remember is that whoever claims you as a dependent gets to claim the credit for expenses they paid. So if your parents are claiming you as a dependent AND they paid your tuition directly (not through loans in your name), they should definitely look into claiming that $18,500 in qualified expenses. The LLC can be worth up to $2,000 per year, so that's potentially significant savings for your family. One last tip: keep detailed records of all your education expenses, even if you don't file this year. You might need them for future tax years or if your situation changes!

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