Question

Jennifer is a full-time student at University. She is finished her Junior year and started her senior year in 2020. Jennifer lived with her aunt while she attended school. Her aunt paid for all of her basic living expenses during 2020, including the summer months. Jennifer's parents paid for Jennifer's tuition costs of $20,000 in 2020. On Jennifer's parents' federal tax return, how much of an education credit can they claim for 2020

Answer 1

Answer:

Jennifer parents can get a tax credit of $2,500

Explanation:

As per the rule smaller of the two can be claimed as education tax credit

a) $1000 (40% of the total eligible tax credit)

b) maximum annual credit of $2,500 per eligible student

Jennifer parents can get a tax credit of $2,500