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Is AOTC allowed when paid with Coverdell funds?

hmosbergea
Level 3

Can parents claim AOTC when paid with Coverdell funds as long as tuition amount taxed on child's return?

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TaxGuyBill
Level 15

Yes, you can apply the Coverdell withdrawals to non-tuition (potentially making part of it taxable, but be sure to apply Coverdell to housing expenses), thereby allowing some tuition to be used for the American Opportunity Credit.

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TaxGuyBill
Level 15

Yes, you can apply the Coverdell withdrawals to non-tuition (potentially making part of it taxable, but be sure to apply Coverdell to housing expenses), thereby allowing some tuition to be used for the American Opportunity Credit.