Can a Parent Claim a Child’s 1098-T on a Tax Return?

A parent can claim a child’s 1098-T on their tax return, but only when the parent claims that child as a dependent. The 1098-T is an informational form from the school; it does not decide who gets the tax break. If you claim your college student as a dependent, you are the one who claims the related education credit — worth up to $2,500 per year — no matter who actually paid the tuition. If no one claims the student as a dependent, the student claims the credit on their own return.

Is Your College Student Your Dependent?

Everything turns on the dependency question. Most college students who can be claimed by a parent qualify under the Qualifying Child test, which has four requirements: the student is your child, stepchild, sibling, or a descendant of one of them; the student is under age 24 at year-end and enrolled full-time for at least five months during the year; the student lived with you for more than half the year, with time away at college counted as time at home; and the student did not provide more than half of their own support.¹

The support test is the one that catches families off guard. Student loans in the student’s name count as the student’s own support if the student actually spends the money on their own support. Scholarships are excluded from the support calculation entirely, so a full-ride scholarship does not, by itself, prevent you from claiming the student.²

If your student is 25 or older, or dropped below full-time, the Qualifying Relative test is the backup. It requires the student’s gross income to fall below an annual IRS threshold (currently $5,050) and requires you to have provided more than half of the student’s total support for the year. A working student who earns more than the gross income limit cannot be claimed this way, even if you paid every tuition bill.¹

What the 1098-T Actually Lets You Claim

The 1098-T is the starting point for one of two federal education credits, and you can claim only one per student per year.³

The American Opportunity Tax Credit is worth up to $2,500 per student per year: 100% of the first $2,000 in qualified expenses plus 25% of the next $2,000. It applies only during the first four years of college, and the student must be pursuing a degree at least half-time. Forty percent of the credit, up to $1,000, is refundable, meaning you can receive that portion as cash even if you owe no tax.⁴

The Lifetime Learning Credit is broader but smaller: 20% of the first $10,000 in qualified expenses, capped at $2,000 per return (not per student). There is no year limit, and it covers undergraduate, graduate, professional, and job-skills courses. The LLC is fully nonrefundable.⁵

Box 1 of the 1098-T shows tuition and required fees paid to the school. Both credits cover those. Books and supplies count for the AOTC even if you bought them elsewhere; for the LLC, they only count if the school requires you to purchase them directly from the institution. Room and board, insurance, transportation, and medical costs never qualify, even when the school bills them alongside tuition.³⁶

Both credits phase out at the same income levels. You get the full credit with modified adjusted gross income of $80,000 or less ($160,000 joint). The credit shrinks between $80,000 and $90,000 ($160,000 to $180,000 joint) and disappears above $90,000 ($180,000 joint). These thresholds are not adjusted for inflation. Married filing separately cannot claim either credit.⁴

How You Actually Put It on Your Return

When you claim the student as a dependent on your Form 1040, you are the only person who can claim an education credit for that student. The student cannot claim the credit on their own return, even if the student personally paid every tuition bill. The IRS treats all of the student’s qualified expenses as paid by whoever claims the dependent.⁷

You report the qualified expenses on Form 8863, Education Credits, and attach it to your return.⁸ Before you calculate the credit, subtract any tax-free educational assistance the student received — scholarships, grants, employer tuition benefits, or veterans’ education benefits. Only what remains is eligible.⁹

If the student is also filing their own return, they must check the box indicating they can be claimed as a dependent on someone else’s return. That check disqualifies the student from claiming any education credit.⁷

When the Student Claims the Credit Instead

If no one claims the student as a dependent, the student claims the education credit. This is the situation for students who are over the age limit, not enrolled full-time, or providing more than half of their own support.

A rule that catches many families: if a parent paid the tuition but does not claim the student as a dependent, the IRS treats the payment as a gift to the student, and the student is considered to have paid the school. The student uses those expenses to claim the credit. The parent gets no tax benefit from having written the check.⁹

One restriction hits some independent students under 24: if you are a full-time student under 24, your earned income is less than half your support, and at least one parent is alive, you cannot claim the refundable portion of the AOTC. You can still take the nonrefundable part to reduce tax, but the $1,000 cash refund is off the table.³

When Skipping the Dependency Claim Saves Money

If your income exceeds $90,000 ($180,000 joint), you are fully phased out of both education credits. Claiming your child as a dependent locks out the credit for everyone — you cannot use it, and neither can the student, because the student is your dependent.

Claiming a dependent is optional. If you choose not to claim a qualifying child, the student can claim the education credit on their own return, provided the student’s income falls under the phase-out threshold. The IRS puts this plainly: if you do not claim a dependent who is an eligible student, even though you could, only the student can claim the credit.⁹

The cost is the $500 credit for other dependents you give up. The benefit is that the student’s return can capture up to $2,500 through the AOTC (or at least the $1,000 refundable portion). Run the numbers both ways. This one decision can move the family’s total tax bill by more than $2,000.

Divorced or Separated Parents

Under the special rule for children of divorced or separated parents, the custodial parent can sign Form 8332 to release the dependency claim to the noncustodial parent. That release lets the noncustodial parent claim the child tax credit and the credit for other dependents.¹⁰

Form 8332 does not move the education credit by itself. The education credit follows whoever actually lists the student as a dependent on their return. If the noncustodial parent claims the child through Form 8332, that parent claims the education credit. If neither parent claims the student, the student claims it. The question is always: whose return has the student as a dependent?⁷

This creates a real planning opening. If the custodial parent’s income phases out the credit and the noncustodial parent’s does not, releasing the dependency claim can move the credit to the parent who can actually use it. Divorce agreements should address who claims the child for education credit purposes, not only for the child tax credit.

Watch the Overlap With 529 Plans and Scholarships

You can take tax-free distributions from a 529 plan and claim an education credit in the same year, but not for the same dollars of expense. No double-counting.⁹

The practical move is to allocate the first $4,000 of tuition to the AOTC, which generates the maximum $2,500 credit, and use 529 funds for the rest, including room and board (which does not qualify for the credit but does qualify for tax-free 529 distributions). Families who pay everything from the 529 first often accidentally leave no qualified expenses for the credit.

Scholarships and grants require their own step. Reduce your qualified expenses by the tax-free portion of any scholarship before computing the credit. There is a legitimate workaround: the student can choose to treat some scholarship money as taxable income on the student’s return, which preserves those expenses as “paid” for credit purposes. For a student in a low tax bracket, paying a little tax on scholarship income can produce a much larger education credit.¹¹

If the 1098-T Is Missing or Wrong

Schools don’t have to issue a 1098-T in every case. Common exceptions: the student is a nonresident alien and didn’t request one, scholarships covered the entire tuition, or expenses were paid through a formal billing arrangement with an employer or government agency.¹²

You can still claim the AOTC without the form if the school wasn’t required to issue one, or if the school closed before sending it. You need to show the student was enrolled at an eligible institution and back up the expenses with receipts, billing statements, or bank records.¹²

If Box 1 looks wrong, don’t just use the number on the form. The 1098-T is an informational starting point. Your own records of what you actually paid for qualified expenses control the calculation. Ask the school’s bursar office for a corrected form if the difference is meaningful.

Documentation and Penalties

Audits of education credit claims are not rare. If an audit finds the claim was incorrect and you cannot document it, you owe back the credit plus interest. You may face an accuracy-related penalty or a fraud penalty, and you can be banned from claiming the AOTC for two to ten years.³

Keep tuition receipts, billing statements, scholarship award letters, and 1098-T forms for at least three years after filing, longer if you claimed the AOTC across all four eligible years. When you are the one claiming the credit, you need those records on your side, not just the student’s.

1
Internal Revenue Service. Dependents
2
Internal Revenue Service. Dependents (Publication 4491)
3
Internal Revenue Service. Education Credits: American Opportunity Tax Credit (AOTC) and Lifetime Learning Credit (LLC)
4
Internal Revenue Service. American Opportunity Tax Credit
5
Internal Revenue Service. Lifetime Learning Credit
6
Internal Revenue Service. Qualified Education Expenses
7
Internal Revenue Service. 2025 Instructions for Form 8863
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Internal Revenue Service. Form 8863 – Education Credits (American Opportunity and Lifetime Learning Credits)
9
Internal Revenue Service. Publication 970 (2025), Tax Benefits for Education
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Internal Revenue Service. Publication 501 (2025), Dependents, Standard Deduction, and Filing Information
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Internal Revenue Service. No Double Education Benefits Allowed
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Internal Revenue Service. Education Credits: Questions and Answers