We're in the extremely nice situation of struggling to reach $4000 to maximize the AOC tax credit for our daughter.
She only owes $784 for Spring semester tuition and fees, which will bring her up to about $3500 for the calendar year (including books). Her loans cover that amount completely, and she'll get a refund.
We want that to count on this year's taxes since she this is her 4th year and she won't be eligible next year. For it to count on this year's taxes, I know we need to pay it this month. Do we need to literally pay it, and then get refunded, or can it be applied against the loans before Dec. 31?
The school says the 1098T only shows calendar year charges, not payments. I've always gone off what we actually pay (keeping records of course), but this is the first year we've had loans in the picture (younger kid started college, so we took them) and her scholarships were increased.
She can't shift any of the scholarships to room and board, as she's an RA with room and board covered 100%.
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