Do I claim myself as an independent?

[23dyoung]

I am a 19 year old college student, working two jobs and providing the vast majority of my support. Should I claim myself, or should my parents claim me? Will I get significantly less taken out of my paychecks if I am an independent? Also, what are the benefits to being a dependent on your parents. Can I only be listed on my parents health insurance if I am listed as a dependent? Also, are you allowed to change your filing status from dependent to independent mid-year?

I'm sorry for all of the questions, I'm just very confused, I've been getting a lot of money taken out of my paychecks, and I don't see many pros to continue being claimed by my parents. I'm just trying to weigh all of my options before I change my status. 

Thanks, 

23dyoung

[Hal_Al · Accepted solution]

It's not optional. If you are providing more than half your own support, you parents are not allowed to claim you. See dependency rules below.

If you live with them and are not paying them rent, it's unlikely that you are supporting yourself. IRS Publication 501 on page 15 has a worksheet that can be used to help with the support calculation. See: http://www.irs.gov/pub/irs-pdf/p501.pdf The support value of a home is the fair market rental value, divided by the number of occupants.

The "status" you claim at work (form W-4) is not binding on how you actually file a tax return, so you can change that mid year. It's only an estimate. But, there is no half year dependency allowed on an actual tax return.

Usually, not being a dependent is reason enough to be disqualified from parent's health insurance, but you'll have to check their rules for a definitive answer.

If it was optional, the only way to know which is best (claim yourself or have parent claim you) is  for both of you to prepare returns both ways and compare. But the general rule is it's better for the parent's to claim the student. 

[Hal_Al]

A child of a taxpayer can still be a “Qualifying Child” (QC) dependent, regardless of his/her income, if:
1. He is under age 19, or under 24 if a full time student for at least 5 months of the year, or is totally & permanently disabled
2. He did not provide more than 1/2 his own support
3. He lived with the parent (or was away at school) for more than half the year
 
So, it doesn't matter how much he earned. What matters is how much he spent on support. Money he put into savings does not count as support he spent on him self.

A person can still be an other dependent (Qualifying relative in IRS parlance, even though they do not have to actually be related), if not a Qualifying Child, if he meets the 6 tests for claiming a dependent:
1. Closely Related OR live with you ALL year
2. His/her gross taxable income for the year must be less than $3,900 (2013)
3. You must have provided more than 1/2 his support
In either case:
4. He must be a US citizen or resident of the US, Canada or Mexico
5. He must not file a joint return with his spouse or be claiming a dependent of his own
6. He must not be the qualifying child of another taxpayer

[23dyoung]

Thank you so much for your answers. I work two jobs, and receive a full scholarship for school, and attend college away from home. I do not live at home, and I pay my own rent with my own money, so I definitely provide over half my support.

[TaxGuyBill]

However, your parents may not realize these rules.  Have you asked them if they already filed their taxes and claimed you as a dependent?

[23dyoung]

Yes, I know that for the 2013 year, they claimed me as a dependent. I am interested in finding out about 2014.

[Hal_Al]

Some technicalities may be creeping into the picture. If you receive "full scholarship for school", you probably do NOT provide over half your own support. Scholarships are considered third party support and are neither support provided by the student or by his parents.  This makes a difference in  the  slightly different support rules for a Qualifying child and a qualifying relative.

If you are not living at home only because you are away at school (even if living off campus), you may still be considered as still  living with your parents.

[Knguy7]

That's pretty **bleep**ing unfair. rules outdated bo, government needs to fix it ASAP.

[Hal_Al]

@Knguy7 

If this is about the stimulus payment:

Under the CARES Act, if you are claimed as a dependent on someone else’s return you cannot receive a stimulus check, in 2020.   If you were claimed as a dependent for 2019, but will not be for 2020, you will most likely get it  in 2021.

In regards to the stimulus payment, when you file your 2020 income tax return, you will be asked for information about the amount of the stimulus payment you received, and if it is less than you are entitled to, you will be given a credit on your 2020 tax return.

"In essence, the stimulus check acts as an advance of your 2020 income tax refund. This means when you prepare your 2020 income tax return, there will be a line to include the section 6428 credit. The credit on your 2020 return is subtracted by any amount received as a stimulus check in 2020. If the amount you received as a stimulus check is less than the credit you are due, the difference will be included as part of your 2020 refund. If you have been overpaid by receiving the stimulus check, however, you will not be required to return any excess amount".

[Ajackson5]

Hello,

I have a similar question. I am 21 years old and I would like to file as an independent. I am currently paying for my car insurance, cell phone insurance, food, clothes/necessities, and I am going to college and paying for that as well as books, parking, etc. I am not receiving any scholarships for college. I also work full time as a teaching assistant in order to pay for school. My parents pay for "room and board" as I live at home with them. Can I file as an independent? I believe with everything that I am paying for that they pay for less than half of my living expenses. 

[Cynthiad66]

Yes.  Sounds like you qualify to claim yourself as an independent.  But coordinate with your parents to let them know that they can no longer claim you because you are claiming yourself.    Also, on your return this year you check that you cannot be claimed by anyone else.

Remember, that as an independent you now qualify for the Stimulus check and to claim Education Credits.

Be sure to complete the Recovery Rebate Credit for the Stimulus checks.

Here’s how:

• Enter all of your federal return information as you would normally. During the Federal Review, we’ll check if you meet eligibility requirements for the stimulus payment. If you meet the requirements, you'll see a It looks like you qualified for the stimulus, did you get any payments? screen. We'll ask a few questions about any payments you've already received and then let you know if the Recovery Rebate Credit applies.
  • If you need to make any changes to your stimulus credit responses, search for stimulus and select the jump-to link at the top of the search results to return back to the section. Enter your updated info and Continue.

It’s important that you enter the correct amount of each stimulus payment you received. The first stimulus payments were made between April and September of last year, while the second round of payments were delivered during January and February. You can find the exact amount,

• On your IRS letter-Notice 1444 and/or 1444-B which were mailed to you with the headline, “Your Economic Impact Payment Has Arrived” and were signed by the president. Or,
• By visiting IRS.Gov and creating or accessing your account. Or,
• In your bank statements. You might be able to search your online statements for deposits made by the IRS or US Treasury.

Follow this link for more information:

The Recovery Rebate Credit (Stimulus Check)

[john_duff_7259]

@Cynthiad66 Hello i’m 19 and I’m claiming independent for the first time as i’ve lived away from home since march of 2020 and have completely supported myself financially for the entirety of the year. I haven’t filed my taxes yet and I was just curious to as if there’s anything different from being claimed on my parents tax returns or if theres any benefits that come along with filing independent. I was also curious that if I received no money from the first two stimulus’s because I was claimed in 2019 on my parents if i would back-payed for those as well because I would be filing independent for the 2020 tax year .

[Cynthiad66]

Yes.

When you prepare your 2020 tax return there is an opportunity to claim the Stimulus1 and Stimulus 2 payments using the Recovery Rebate Credit.  Stimulus 3 should be based on this return.

There are benefits to filing and claiming yourself on the return, because you can now claim benefits that your parents claimed for you.  If you are a college student you will need to file that to get an Education Credit.  If you need additional help once you start your return, please contact us again.  Congratulations on being Independent!!

Here is how to claim the Recovery Rebate Credit:

The Recovery Rebate Credit

[mohabib]

Hello : ) I've been looking for the answer to this question all over and have yet to find a clear and concise understanding of it. I'm a twenty-year-old full-time college student who lives with my mom and dad. I work multiple jobs and pay for just about every expense other than the housing. Car payment, insurance, gas, phone bill, food, health insurance. I was wondering if this would be enough to claim myself as an independent? I'm trying to recover the stimulus checks that I wasn't able to receive from last year due to being claimed by my parents. Thanks for everything in advance!

[Hal_Al]

There are two types of dependents, "Qualifying Children"(QC) and standard ("Qualifying Relative" in IRS parlance even though they don't have to actually be related). There is no income limit for a QC but there is an age limit, student status, a relationship test and residence test.

A child of a taxpayer can still be a “Qualifying Child” (QC) dependent, regardless of his/her income, if:

1. He is under age 19, or under 24 if a full time student for at least 5 months of the year, or is totally & permanently disabled
2. He did not provide more than 1/2 his own support. Scholarships are excluded from the support calculation
3. He lived with the parent (including temporary absences such as away at school) for more than half the year

So, it doesn't matter how much he earned. What matters is how much he spent on support. Money he put into savings does not count as support he spent on him self.

The support value of the home, provided by the parent, is the fair market rental value of the home plus utilities & other expenses divided by the number of occupants.

The IRS has a worksheet that can be used to help with the support calculation. See: http://apps.irs.gov/app/vita/content/globalmedia/teacher/worksheet_for_determining_support_4012.pdf

So, the answer to your question is: do the math and see if you provide more than half your own support.

Under the CARES Act, if you are claimed, or qualify to be claimed, as a dependent on someone else’s 2019 return you cannot receive a stimulus check, in 2020.   If you qualified as a dependent for 2019, but will not be for 2020, you will most likely get it in 2021, when you file a 2020 tax return.

Note that the requirement is not just whether you are actually claimed as a dependent, it's whether you qualify to be claimed as a dependent.