child

[dbrooks4]

I have three questions regarding my tax return and my daughter’s tax return, but first here is some background information.  During 2021, my daughter lived at college in Pennsylvania for approximately 4 months, she lived at home in Pennsylvania for approximately 3 months, and she lived in Ohio while attending college there for approximately 5 months.  While she was in college in PA nearly all of her support were distributions from her 529 plan for tuition, room, and board.  While she was living at home in PA my wife and I also provided nearly all of her support.  While she lived in Ohio, the vast majority of her support were distributions from her 529 plan for tuition and rent (she paid for food, utilities, and other misc items).  All of the contributions to her 529 plan over the years have been from my wife and me.  My daughter had earned income from PA during 2021, but none from OH.

• Can my wife and I claim her as a dependent on our 2021 tax return?
• Does my daughter have to file an Ohio state tax return for 2021, or just a PA one?
• In Turbo Tax, it asks if she lived in another state in 2021.  Should she check “yes” or “no”?

[MinhT1]

1. If your daughter is under 24 and a full time student, she can claim her as a dependent if she did not provide for more than half of her own support with her earned income.

2, Your daughter has to file a state return in PA only. Not  in OH as she had no OH sourced income.

3. You should answer No to the question whether she lived in another state. Absences for attending college are temporary absences, and your daughter is considered as living in your home the whole year.

[dbrooks4]

Thanks for the reply.  One follow-up to your answer to question #1.  Do the payments from my daughter's 529 plan count towards the parents' support or does it count towards my daughter's support?

[DawnC · Accepted solution]

Neither.   But in order for you to claim her as a child dependent, the requirement is that she did not provide for more than half of her support.   You don't have to provide over 50% support to claim your child as a dependent -- As long as she did not provide over half of her own support, you can still claim her as a dependent.  

If a parent or someone else (or a 529 plan) paid for more than half of her living expenses, she did not support herself.   If she used unearned income or student loans to pay for most of her expenses, she did not support herself.   

What does "financially support another person" mean?   This FAQ is referring to ADULT dependents.    The rules are different for child (including FT students) dependents.  See below:

You can claim a Qualifying child if:

• They're related to you.
• They aren't claimed as a dependent by someone else.
• They're a U.S. citizen, resident alien, national, or a Canadian or Mexican resident.
• They aren’t filing a joint return with their spouse.
• They're under the age of 19 (or 24 for full-time students).
  • No age limit for permanently and totally disabled children.
• They lived with you for more than half the year (exceptions apply).   Time away at school counts as living with you
• They didn't provide more than half of their own support for the year. ***

***  For your child dependent, you can claim them if they do not provide over half of their support.    For adult dependents, you have to provide more than 50% of their support in order to claim them as a dependent on your tax return.   

[Hal_Al]

Q. Do the payments from my daughter's 529 plan count towards the parents' support or does it count towards my daughter's support?

A. Simple answer: That's parental support.

The treatment of expenses paid with distributions from Sec. 529 plans and Coverdell ESAs in the support test is uncertain because of the dual nature of these college savings vehicles and a lack of IRS guidance. The consensus among tax experts is that it is parental support, because the parent is the owner of the plan.