1098-T in my child's name who is no longer a dependent

[Dom2]

We received a 1098-T in my daughter's name for her final graduate semester.  I've always entered this amount on our taxes as she was a dependent.  For 2020 that is no longer the case.  Not sure what the legal requirements are and/or if we have flexibility as to who claims it.  Not a huge amount of money but want to do things correctly. 

[MinhT1]

If your daughter is longer your dependent (for example because she is 24 or older), she only can claim her education expenses on her form 1098-T.

[Dom2]

Thanks much

[Hal_Al]

Why is she nolonger a depedent?

Be advised that grad students are not eligible for the refundable credit (American Opportunity Credit).  So, she would have to have had enough income  to have a tax liability for the Lifetime Laerning credit to do her any good. 

[Dom2]

"Why is she nolonger a depedent?" She turned 24 in 2020.  Thanks for the credit info.

[Hal_Al]

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 and student status test, a relationship test and a residence test. Only a QC qualifies a taxpayer for the Earned Income Credit and the Child Tax Credit. Turning 24 only means she can no longer be a QC.

A person can still be a Qualifying relative dependent, if not a Qualifying Child, if he meets the 6 tests for claiming a dependent:

1. Closely Related OR live with the taxpayer ALL year
2. His/her gross taxable income for the year must be less than $4300 (2020).
3. The taxpayer must have provided more than 1/2 his support

In either case:

4. He must be a US citizen or resident of the US, Canada or Mexico
5. He must not file a joint return with his spouse or be claiming a dependent of his own
6. He must not be the qualifying child of another taxpayer

[Dom2]

Thanks Hal_Al

Looks like she fails number 2 - His/her gross taxable income for the year must be less than $4300 (2020).  Appreciate all the info.