Can grandparents or students who pay tuition claim education tax credits, or only parents?

Only the person who claims the student as a dependent can claim the education credit, and generally only one taxpayer per student per year. If parents claim the student on their return, they claim the credit even if a grandparent actually paid the tuition; the IRS treats a grandparent's direct payment to the school as a gift to the student, who is then deemed to have paid it. If the student is not claimed as anyone's dependent, the student can claim the credit themselves. Grandparents cannot claim a credit for a grandchild they do not claim as a dependent. Families sometimes decide who claims the student strategically, since a lower-income parent or the student may get more benefit. The IRS lays out these rules in Publication 970.