Daughter studying abroad

[baguioboy1959]

My daughter is studying in Hillsong College Hills Campus in Sydney Australia is her expenses tax deductible? The school is not accredited in FAFSA for international school. We pay her school expenses and her board/lodging.

[ColeenD3]

Unfortunately, no. One of the requirements is that the university participates in a student aid program administered by the US Department of Education.

[baguioboy1959]

ColeenD3, happy new year. Do we have changes on my question about the education expenses of my daughter? Can I instead claim the expenses as support to my daughter she is 20 years old and she still in Sydney, Australia. Thank you.

[Opus 17]

---

@baguioboy1959 wrote:

ColeenD3, happy new year. Do we have changes on my question about the education expenses of my daughter? Can I instead claim the expenses as support to my daughter she is 20 years old and she still in Sydney, Australia. Thank you.

---

No, you can't claim any education expenses if the school is not accredited by the US Dept of Education.

Your daughter can probably be your dependent, if she is a US citizen and has a social security number.  She can be considered to "live at home" if she is away for a temporary absence, and college is usually considered a temporary absence.  An adult dependent gets you a $500 tax credit.  However, if she has taken steps to permanently move out of your home, such as to emigrate to Australia or move in with a boyfriend or spouse, the question of whether she can be a dependent is more complicated. 

[Hal_Al]

Although the tuition, and other expenses, paid to a non eligible educational institution, do not count toward claiming an education credit or deduction, that money does count as support. you provided, in determining whether someone qualifies as your dependent.

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. Only a QC qualifies a taxpayer for the Earned Income Credit and the Child Tax Credit. They are interrelated but the rules are different for each.

The support test is different for each type. The support test, for a QC, is only that the child didn't provide more than half his own support. The support test for a Qualifying Relative is that the taxpayer provided more than half the relative's support.

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 considered third party support and not as support provided by the student.
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