1098t question

[Cindy 2511]

We claimed our son as a dependent in 2023. We received a 1098t for 2023 after filing so didn't use it. This year for filing 2024 he doesn't qualify as one of  dependents. The  2023 1098t has his name on it. Can he use it when filing his own 2024 taxes even though in 2023 he was one of our dependents?

[KrisD15]

No, the 1098-T and education credits are reported on the same year tax return. 

A 2023 Form 1098-T is reported on a 2023 tax year return.

[Hal_Al]

Q. Can he use it when filing his own 2024 taxes even though in 2023 he was one of our dependents?

A. No, for three reasons. 1. the 2023 1098-t can only be used on a 2023 tax return. 2. It was already used on your tax return 3. As a dependent, he would not qualify for the refundable tax credit.

Q. This year for filing 2024 he doesn't qualify as one of  dependents.

A. That's unusual. What has changed. Having too much income does not disqualify a fulltime student, under age 24, from being a dependent.

If 2024 was graduation year, read on:

Can the student be claimed as a dependent in the Graduation year? (answer written as if the parent asked the question)

If he/she was a student (under 24) for at least 5 months and lived with you for more than half the year, and did not provide more than 1/2 his own support for the whole year, you can still claim him. Be sure he knows you're claiming him, so he doesn't claim himself. He can only be claimed once. But, he can "file taxes" without claiming his own exemption.

The real question is who should be claiming him in this "transition" year to adulthood. You two have to agree on who is going to claim his exemption. Each should do their taxes both ways and see which way the family comes out best.  Even then, you have to meet the rules. 

There are two types of dependents, "Qualifying Children"(QC) and Other ("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. Only a QC qualifies a taxpayer for the Earned Income Credit.

The rule is that a child of a taxpayer can still be a “Qualifying Child” dependent, regardless of his income, if:

1. he is a full-time student under 24 for at least 5 calendar months of the year (graduating in May usually means you meet the 5 month rule)
2. he did not provide more than 1/2 his own support  (scholarships are considered 3rd party support and not support provided by the student). 
3. lived with the parent (including time away at school) for more than half the year

So, it usually hinges on "Did he provide more than 1/2 his own support in 2024.

The support value of the home you provided is the fair market rental value of the home plus utilities & other expenses divided by the number of occupants. IRS Publication 501 on page 20 has a worksheet that can be used to help with the support calculation. See: http://www.irs.gov/pub/irs-pdf/p501.pdf  (page 15)

If he has already filed one way, he can file an amended return, going the other way.