cancel
Showing results for 
Search instead for 
Did you mean: 
Highlighted
Level 1

Qualifying dependent - full time student

I have a full time college student who earned $4,300  from a part-time job during 2015 and lived at home for 3 months during the year.  I've paid more than 50% of his support during 2015.  Can he be considered a qualified dependent on my tax return.
1 Best answer

Accepted Solutions
Level 20

Qualifying dependent - full time student

The support requirement is on the student, NOT the parent. The parent is not required to provide one single penny of support. The requirement is that the STUDENT did NOT provide MORE than 50% of the STUDENT'S support. Please read all the below for a clearer picture of how this education stuff works.

              • College Education Expenses

Colleges work in academic years, while the IRS works in calendar years. So the reality is, it takes you 5 calendar years to get that 4 year degree. With that said:

 - Scholarships and grants are claimed/reported as taxable income (initially) in the year they are received. It does not matter what year that scholarship or grant is *for*

- Tuition and other qualified education expenses are reported/claimed in the tax year they are paid. It does not matter what year they pay *for*.

Understand that figuring out who claims the student as a dependent, and determining who claims the education expenses & credits, is two different determinations. It depends on the specific situation as outlined below. After you read it, I have also attached a chart at the bottom. You can click on the chart to enlarge it so you can read it. If it’s still to hard to read on your screen then right-click on the enlarged image and elect to save it to your computer. Then you can double-click the saved image file on your computer to open it, and it will be even easier to read.

 

Here’s the general rules gisted from IRS Publication 970 at http://www.irs.gov/pub/irs-pdf/p970.pdf Some words are in bold, italicized, or capitalized just for emphasis. This is because correct interpretation by the reader is everything. Take the below contents LITERALLY, and do not try to “read between the lines”. If you do, you’ll interpret it incorrectly and risk reporting things wrong on your taxes. For example, there is a vast difference between “can be claimed” and “must be claimed”.  The first one indicates a choice. The second one provides no choice.

 

If the student:

Is under the age of 24 on Dec 31 of the tax year and:

Is enrolled in an undergraduate program at an accredited institution and:

Is enrolled as at least a half time student for one academic semester that begins during the tax year, (each institution has their own definition of a half time student) and:

the STUDENT did NOT provide more that 50% of the STUDENT’S support (schollarships/grants received by the student ***do not count*** as the student providing their own support)

Then:

The parents will claim the student as a dependent on the parent's tax return and:

The parents will claim all schollarships, grants, tuition payments, and the student's 1098-T on the parent's tax return and:

The parents will claim all educational tax credits that qualify.

If the student will be filing a tax return and:

The parents qualify to claim the student as a dependent, then:

The student must select the option for "I can be claimed on someone else's return", on the student's tax return. The student must select this option ieven f the parent's qualify to claim the student as a dependent, and the parents do not claim them.

Now here’s some additional information that may or may not affect who files the 1098-T. If the amount of scholarships/grants exceeds the amount of qualified education expenses, the parent will know this when reporting the education on their tax return, because the parent will not qualify for any of the tax credits. (They only qualify for tax credits based on out-of-pocket qualified expenses not covered by scholarships/grants.)  Also, the parent’s will not qualify for the credits depending on their MAGI which is different for each credit, and depends on the marital status of the parent or parents.

In the case where scholarships/grants covers “all” qualified education expenses, the parent’s don’t need to report educational information on their dependent student at all – but they still claim the student as a dependent if they “qualify” to claim the student.

 If the scholarships/grants exceed the qualified education expenses, then the student will report the 1098-T and all other educational expenses and scholarships/grants on the student’s tax return. The student will pay taxes on the amount of scholarships/grants that are not used for qualified education expenses. However, if the student’s earned income reported on a W-2, when added to the excess scholarships/grants does NOT exceed $6200, then the student doesn’t even need to file a tax return, and nothing has to be reported.

If the student has any other taxable income not reported on a W-2, and it exceeds $400, (not including taxable portion of scholarships/grants) then most likely it’s considered self-employment income. That will require a tax return to be filed and the student will have to pay the Self-Employment tax on that income.

Finally, regardless of the student’s W-2 earnings, if any taxes were withheld on those earnings and it was less than $6200, then the student should file a tax return so as to get those withheld taxes refunded.

 


24 Replies
Level 1

Qualifying dependent - full time student

Student earned $6000; what then?
Level 20

Qualifying dependent - full time student

Read what I posted previously. There is NO income limit what-so-ever on the student, and there is NO support requirement on the parent. The student can earn a million dollars, and so long as the STUDENT did NOT provide MORE than 50% of their OWN support, the parent qualifies to claim them. There is no requirement for the parent to provide one single penny of support.
Level 1

Qualifying dependent - full time student

How do I bypass the $4000 requirement? If I answer yes, my daughter is disqualified and I can't claim her or the education deductions.  If I answer no, even though she did, she qualifies, but I just lied to get the deduction.
Level 20

Qualifying dependent - full time student

You answered something wrong if you're being asked about income on a dependent student under the age of 24 on dec 31 of the tax year. I suggest you go back to the Personal Info section and completely delete her from the Dependents section, and then reenter her information anew. But this time, read each screen slowly, carefully, and completely. (the notes in small print *do* matter). Then go back to the education section and try again.
The question I suspect you're answering wrong is asking if your daughter provided more than 50% of her support. It's not asking if YOU did.
Level 1

Qualifying dependent - full time student

Thanks! I was thinking of doing that because it makes no sense.
Level 1

Qualifying dependent - full time student

My error was in the amount of time she lived with us in the year.  Being away for school as a full time student is considered a "temporary absence"; therefore I can say she lived with me all year.  Once this was corrected, her income did not factor in.  Thanks for the assistance!
Level 1

Qualifying dependent - full time student

I went back and deleted it my daughter and added her again and I am still getting that she is not eligible as a dependent.  I have put that she lived with us for 5 months and that no she did not pay for half of her expenses and she only made $4090 last year.  Why is it still saying that she is not eligible as a dependent on our taxes
Level 1

Qualifying dependent - full time student

If your daughter is a college student (at least half time) and is away from home, that is considered a "temporary absence", which is a valid reason to live away from home,  and can be counted as living at home all year.  Instead of stating she lived with you 5 months,  select all year.  This will bypass the question of how much she earned. Click on the help link on the "living with you" question and it'll explain what the valid reason for living away from home are.
Level 20

Qualifying dependent - full time student

Spot on. The "learn more" link does state to consider time spent away at school, as having lived with you.