Do I have to claim my 21 year old full time college student as a dependent ?

[PhatFrancis]

Hi, 

 I have a couple of questions regarding to how classify my 21 year old full time student.  She is living off campus for the entire year but  away from our  home.  Turbo tax qualifies the student as still considered living at home even though student is away at college. Is that correct?  Then later on in  the CA state return, it asked what is the principal residence information if it differs from the permanent address (she has the temporary address at college which differs from her permanent address).

1. Why are they asking for that?

 2. Do I enter the address she is living at during school?

 3. If I do that, will all her tax correspondence  go to this college address?

  Not sure how to answer this part.

On another line of question, it seems Turbo Tax automatically  reclassified my daughter's  status to single/ and not able to be  claimed as a dependent on anyone's return.  I don't qualify for any of the education credit so would I need to claim her as a dependent on the return?  I do support her more than 1/2 financially so not sure for my tax return if I should claim her as dependent or not. Hope you can advise and thanks in advance

[xmasbaby0]

The rule is if she CAN be claimed as someone else's dependent then she must say on her own return that someone else can claim her.    Even if you do not end up claiming her--she is required to say she CAN be claimed as a dependent.   If she is filing her own tax return to seek a refund of tax withheld from her own paychecks, she must say in MY INFO that she can be claimed.   As for her address, she should use the address where she wants the IRS and CA to mail her a letter or a check.      If you do claim her, you can say she still lives at home since living on campus is considered to be a "temporary absence".      Whether or not you qualify for education credits or not, you can get the $500 credit for other dependents for claiming her.    If you are a single parent you can also get Head of Household filing status if you claim a qualified dependent.

[PhatFrancis]

Thank you for your guidance and reply!

I did what you suggested and put down that she CAN  be claimed as a dependent. However, after entering all her college expenses and W-2 information , it came up that she qualifies for one of the Education credit.

I am not sure if I am entered something wrong because if she can be claimed as a dependent, would that not disqualify her for the education credit?  It shows she has a credit which lowered her tax and receiving refund. 

Under her personal info.. it has single,  can be claimed as dependent,  full time student

Thank you

[Hal_Al]

Q. If she can be claimed as a dependent, would that not disqualify her for the education credit?  

A. Yes.

"Under her personal info.. it has single,  can be claimed as dependent,  full time student". After answering that she can be claimed as a dependent, you get a drop down asking if she will be claimed. You probably incorrectly answered no.  Answer yes, unless you decide that the credit she gets is more than the dependent credit you get ($500).

Technically there is a provision that allows your student-dependent to claim a federal tuition credit, from a practical matter it seldom works out.  A full time student, under age 24, is only eligible for the refundable portion of the American Opportunity Credit (AOTC) if he/she supports himself by working. She cannot be supporting herself on student loans & grants and 529 plans and parental support.  It is usually best if the parent claims that credit.  

If the student actually has a tax liability, there is a provision to allow him to claim a non-refundable tuition credit. But then the parent must forgo claiming the student as a dependent, and the $500 other dependent credit. The student must still indicate that he can be claimed as a dependent, on his return. This is worth up to $2500 (AOTC shifts to all non refundable)