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lgivenmom
New Member

My college students provide more than 50% of their own support, but a large portion of that is from scholarships they receive my income is too high to get education or child tax credits should and c

Should or can my students file independently ?
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Accepted Solutions
Hal_Al
Level 15

My college students provide more than 50% of their own support, but a large portion of that is from scholarships they receive my income is too high to get education or child tax credits should and c

No.

Your student does NOT provide  more than 50% of their own support.  Scholarships (but not loans) are considered third party support and not support provided by the student.

 

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.

 

Furthermore, there is a rule that says IF somebody else CAN claim him as a dependent, he is not allowed to claim himself. If he has sufficient income (usually more than $12,200), he can & should still file taxes. In TurboTax, he indicates that somebody else can claim him as a dependent, at the personal information section.  TT will check that box on form 1040.

Even if he had less, he is allowed to file if he needs to get back income tax withholding. He cannot get back social security or Medicare tax withholding.

View solution in original post

2 Replies
Hal_Al
Level 15

My college students provide more than 50% of their own support, but a large portion of that is from scholarships they receive my income is too high to get education or child tax credits should and c

No.

Your student does NOT provide  more than 50% of their own support.  Scholarships (but not loans) are considered third party support and not support provided by the student.

 

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.

 

Furthermore, there is a rule that says IF somebody else CAN claim him as a dependent, he is not allowed to claim himself. If he has sufficient income (usually more than $12,200), he can & should still file taxes. In TurboTax, he indicates that somebody else can claim him as a dependent, at the personal information section.  TT will check that box on form 1040.

Even if he had less, he is allowed to file if he needs to get back income tax withholding. He cannot get back social security or Medicare tax withholding.

View solution in original post

Carl
Level 15

My college students provide more than 50% of their own support, but a large portion of that is from scholarships they receive my income is too high to get education or child tax credits should and c

There are only two possible ways a student can provide more than half of their own support.

 - The student has a W-2 job or is self employed and earns a sufficient amount in the tax year to justify any claim to providing more than half of their own support. That earned income "MUST" be more than the total of all third party support received in the tax year. Third party  support is scholarships, grants, 529 distributions, fellowships, gifts from Aunt Mary, money from mom and dad, etc.

 - The student is the *PRIMARY* borrower on a *qualified* student loans, and sufficient funds were distributed to the student during the tax year to justify a claim to providing more than half of their own support. The funds distributed from the loan must be more than the total of all third party support (identified above) received during the tax year.

 

Additionally, support costs must be realistic. For example, if the student has $80,000 in third party support and made a million dollars, that would mean they would have to of spent more than $80,000 of their own money *in addition to* the $80,000 of third party support to support themselves for the entire year. Now I don't care where you go to school on this planet, there is no way on this green earth that an undergraduate can justify a total of $160,000 to support themselves for one year. Support costs must be realistic.

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