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I was going to just ask my financial aid office this, but I couldn't reach them this afternoon.

My grandparents want to chip in 5K each year to help pay for tuition, and they're wondering if they can do anything tax related with that (like the lifetime education deduction, etc). Anyone know?

0LNewbie wrote:I was going to just ask my financial aid office this, but I couldn't reach them this afternoon.

My grandparents want to chip in 5K each year to help pay for tuition, and they're wondering if they can do anything tax related with that (like the lifetime education deduction, etc). Anyone know?

They should talk to a tax attorney or a CPA.

(although my guess is that no, they can't - unless they somehow are included on your school records and receive a 1098-T showing tuition paid. Otherwise, it's just a very nice gift from very generous grandparents. Send them a thank you note, and call them often.)

0LNewbie wrote:I was going to just ask my financial aid office this, but I couldn't reach them this afternoon.

My grandparents want to chip in 5K each year to help pay for tuition, and they're wondering if they can do anything tax related with that (like the lifetime education deduction, etc). Anyone know?

I don't think so, unless they claim you as a dependent (which I do not think they can do in normal circumstances).

you, however, will have to file the gift on your taxes, IIRC

..............PS... can i have your grandparents?

fundamentallybroken wrote:
They should talk to a tax attorney or a CPA.

(although my guess is that no, they can't - unless they somehow are included on your school records and receive a 1098-T showing tuition paid. Otherwise, it's just a very nice gift from very generous grandparents. Send them a thank you note, and call them often.)

Noted.

imchuckbass58 wrote:I don't think so, unless they claim you as a dependent (which I do not think they can do in normal circumstances).

Yeah, I'm married, so that definitely wouldn't work.

glitter178 wrote:you, however, will have to file the gift on your taxes, IIRC

WTF? Feels like they take it coming and going, sometimes.

glitter178 wrote:..............PS... can i have your grandparents?

As long as there's enough to go around...

So, would it not be possible for them to give us the money directly, we pay the school, get the credit, and send them the value of the credit after taxes are filed? Is that fraudulent? Gracious, I might need to take tax when I get there.

0LNewbie wrote: So, would it not be possible for them to give us the money directly, we pay the school, get the credit, and send them the value of the credit after taxes are filed? Is that fraudulent? Gracious, I might need to take tax when I get there.

Take out the middle step - figure out what the credit is, and just have them send you that much less (i.e., the tax credit is what, $1500? Have them only send you $3500.)

Of course, I'm terrible at math. That's why I'm going to lawl school.

fundamentallybroken wrote:

0LNewbie wrote: So, would it not be possible for them to give us the money directly, we pay the school, get the credit, and send them the value of the credit after taxes are filed? Is that fraudulent? Gracious, I might need to take tax when I get there.

Take out the middle step - figure out what the credit is, and just have them send you that much less (i.e., the tax credit is what, $1500? Have them only send you $3500.)

Of course, I'm terrible at math. That's why I'm going to lawl school.

You've got it backwards. OP is getting the tax credit in addition to gift, not subtracted from the gift. I assume his grandparents aren't doing it *just* for the tax credit

That seems to make sense to me, but I'm just as bad at it as you.

I think your original advice might be right- consult someone who knows what the hell they're talking about.

0LNewbie wrote:That seems to make sense to me, but I'm just as bad at is as you.

I think your original advice might be right- consult someone who knows what the hell they're talking about.

This.

sambeber wrote:

fundamentallybroken wrote:

0LNewbie wrote: So, would it not be possible for them to give us the money directly, we pay the school, get the credit, and send them the value of the credit after taxes are filed? Is that fraudulent? Gracious, I might need to take tax when I get there.

Take out the middle step - figure out what the credit is, and just have them send you that much less (i.e., the tax credit is what, $1500? Have them only send you $3500.)

Of course, I'm terrible at math. That's why I'm going to lawl school.

You've got it backwards. OP is getting the tax credit in addition to gift, not subtracted from the gift. I assume his grandparents aren't doing it *just* for the tax credit

This totally explains my C+ in statistics. (Stupid gpa killer...)

sambeber wrote:

fundamentallybroken wrote:

0LNewbie wrote: So, would it not be possible for them to give us the money directly, we pay the school, get the credit, and send them the value of the credit after taxes are filed? Is that fraudulent? Gracious, I might need to take tax when I get there.

Take out the middle step - figure out what the credit is, and just have them send you that much less (i.e., the tax credit is what, $1500? Have them only send you $3500.)

Of course, I'm terrible at math. That's why I'm going to lawl school.

You've got it backwards. OP is getting the tax credit in addition to gift, not subtracted from the gift. I assume his grandparents aren't doing it *just* for the tax credit

Arithmetic fail Oops

imchuckbass58 is correct - you grandparents can only claim the Lifetime Learning Credit if they can claim the dependency exemption for you.

From the IRS's website:
Q.2. May an individual claim a Lifetime Learning Credit for paying qualified tuition and related expenses for other family members?

A.2. Yes. An individual may claim the credit for his/her own qualified tuition and related expenses and the qualified tuition and related expenses of his/her spouse and other eligible dependents (including children) for whom the dependency exemption is allowed.

OP, if you are not anyone's dependent, and you have income and are filing a return, you get the credit. Also, the 5K you are getting from your grandparents is not taxable income and does not go on your return.

ETA: You can give them a gift equal to the credit amount. But keep in mind that it is an nonrefundable credit - i.e., it will only reduce your tax liability to zero. You may not benefit from the credit if your income is low enough.