My employer pays for my son's graduate school - question on if he is dependent

[sharris91354]

My son gets full tuition remission for his law school through MY employer.
Because this is viewed as a taxable benefit, I get the taxes withdrawn from MY paycheck.
I know he is no longer someone I can claim for child benefits, but I am wondering if he is still a dependent but he's right on the border of how they define dependents...
He just turned 24 Nov. 2024
He is a PT student at Law School
He works PT (earned under $40K)
But I still pay over 50% of his expenses: Due to cost of living in LA since my work pays his tuition, I pay his car insurance (since he just learned to drive and can't get his own policy until it's been a year) and I help with his housing costs (outside of my home).
Since I'm the one who gets hit with the taxes being taken from my paycheck proactively, should I claim him as a dependent to get the tuition benefit and beg forgiveness if I've done it the wrong way?

[Hal_Al · Accepted solution]

 Q. Can I claim him as a dependent?

A. No. His $40K income from part time work disqualifies him.

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.

Turning 24 in 2024 disqualifies him from being a QC.  The rules for a qualifying relative do have an income test and it is only $5050. So, he cannot be QR either.

See full dependent rules at: https://turbotax.intuit.com/tax-tools/tax-tips/Family/Rules-for-Claiming-a-Dependent-on-Your-Tax-Ret...

Q. But, he's right on the border of how they define dependents? 

A. It's all or nothing. And it's nothing in your case. 

Q. Should I claim him as a dependent to get the tuition benefit and beg forgiveness if I've done it the wrong way?

A. No, not with the IRS.  If you're saying your employer requires your adult child to be your tax dependent to qualify for the employee tuition benefit, you should review that with them for any flexibility in the rules. But, I would think not.