If parents’AGI allows:

Parents should claim the student as a dependent to claim the education credits among which American Opportunity Credit is your best bet along with exemption (人头税： 3650x parents’ tax rate). 

The American Opportunity credit and the Lifetime Learning credit cannot be claimed in the same year for the same student, so you'll need to pick one. Because the American Opportunity credit is available for all four years of undergraduate education is worth more, and the income limits to qualify are higher, that credit will probably be your first choice. But if your child is attending school less than half-time, the Lifetime Learning credit will be your only option (assuming you meet the income limits).

Phase-out:

American Opportunity Credit:  $180K;

Lifetime Learning Credit:  120K;

Tuition and Fees Deduction:  160K

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If parents’ AGI disallows or student’s AGI > parents’ AGI (rare, but possible, 后生可畏啊!) ：

Family gets more tax benefit if student claims American Opportunity Credit on his or her own tax return.  In this case, parents can no longer claim student as a dependent since whoever takes an exemption by claiming the student as a dependent gets to claim the education credit.

As A Mao pointed out,  even w/out tax payable, student can still get refundable American Opportunity Credit.   不要白不要呵！ 

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The beauty or art of tax is that taxpayers can plan what/how to report their tax based on their knowledge.  Some people file their return one by one.  I don’t think it is a good idea to do so.  Tax filers need to look at whole picture of family tax issue and try to get most of it, 拆东墙，补西墙. Bear in mind, you know yourself better than anybody else.

for more info, go to:

http://bbs.wenxuecity.com/inv-tax/286819.html

http://bbs.wenxuecity.com/tzlc/293829.html

Good luck and happy tax filing!