.

SmartMoney Blogs

Ask SmartMoney
Your personal finance questions, answered.

Can My Ex-Wife Deduct College Costs I Pay?

Question: I am divorced. My son is 18 and is attending college this fall. I am paying his tuition, books, and fees. My ex-wife has asked if I can send her the money and she will pay the college costs from her account so she can claim one of the tax credits. I just miss the adjusted gross income (AGI) for any tax credit but she does not. I will not be receiving any monies based on her tax savings and/or refund. I do not receive anything from her at any time. Would this violate the law?

- Michael

Answer: The real question here is whether you claim your son as a dependent or your ex-wife does, says Chris Bixby, a senior financial planner for Key Private Wealth in Burlington, Vt. “The person who claims the dependent is the one who gets the credit.” For a parent to claim the child as a dependent, the child must: a) live with that parent for more than half the year, or if he or she is in college, must live at that parent’s home for more of the time when not at college;  b) be under the age of 19 at the end of the tax year or under the age of 24 if a full-time student at least five months of the year; c) must not provide more than half of his/her own support for the year.

If your ex-wife claims  your son as a dependent, you can give her money to pay some college costs so that she can take the education tax credit, so long as she meets the income requirements. Most education and tax credits and deductions — including the Lifetime Learning Credit and the American Opportunity Credit — are phased out for single filers who make more than $80,000 and for married couples filing jointly who make more than $160,000. (See details on a variety of education tax credits.). And be aware that the American Opportunity Credit maxes out at $2,500 annual per student, the Lifelong Learning Credit at $2,000, and that you can only use the tuition and fees deduction to reduce your taxable income by up to $4,000.  Click here to figure out how much aid your child can expect for college.

Comments

We welcome thoughtful comments from readers. Please comply with our guidelines. Our blogs do not require the use of your real name.

Comments (2 of 2)

View all Comments »
    • If he gives his wife the cash to pay the tuition and it’s not considered child support, there is the possibility that it could be considered a gift to his wife. If he is single, he can give her up to $13,000 per year without having to dip into his lifetime exemption for gift/estate tax. It seems to be legal, but the gift tax complications could be an issue. I think the maximum expenditure to claim the full credit is around $10,000, so he could give her that much to pay the tuition without a gift tax problem and pay the rest himself.

    • That isn’t the real question because chances are the divorce agreement states which parent takes the deduction regardless of residence of the child, etc.

      My ex-husband forced me to give him the use of one child–whom he rarely even sees, he lives with me — to claim on his taxes. Was THAT illegal?

About Ask SmartMoney

  • Ask SmartMoney has a single, simple mission: Answer your questions. Answers are written by the staff of SmartMoney.com and SmartMoney magazine, with the help of outside experts. Topics cover investing, spending, retirement planning, saving for college, insurance, taxes and more. Submit your question in the form below, or email ask@smartmoney.com.

.