• SmartMoney

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.

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