I am self supporting college student living on my own. My parents say that because they did not report this to their employers they have to file my 1098t. Is this true?

[jlojpur]

Hello, I have lived on my own for a year and a half now. I am a college student and I support myself. My parents said that since they did not tell their employer that I was independent at the beginning of the year they now have to file my 1098T even though I pay for college on my own. They say that they will be fined by the IRS if they do not file the form and I file it instead. Is this true? Who should be filing the form?

[MichaelMc]

I believe the real question here is whether your parents can still claim you as a dependent. It sounds like they are still claiming an exemption for you on the Form W-4 filed with the employer, and they will have to pay more taxes if, when they file their tax return, they are unable to claim you as a dependent. The rules they must abide by are these:

Generally, you can claim your child as a dependent if:

• The child is a U.S. citizen or resident who lived with you over half the year;
  
• The child is under age 19, or under age 24 if a full-time student;
  
• You provide over half of their support;
  
• The child is not claimed as a dependent by anyone else; and
  
• The child is not filing a joint return.
  

For more information, please see Rules for Claiming a Dependent on Your Tax Return.

If, as you said, you are independent and providing your own support, they will not be able to meet the "over half of their support" test, and cannot claim you as a dependent.

If they cannot claim you as a dependent, they cannot report the Form 1098-T. Only you can claim those expenses and apply for either the American Opportunity Tax Credit or the Lifetime Learning Credit.