Do my son need to file federal tax return if... (see below)

[JayKP]

Hello,

My son who in college, worked in summer 2024 and earned $1606 from summer work. His tuition is paid by combination of 529, scholarship, student loan and from out of pocket (which i paid). The total tuition is much more than total of 529 reimbursement. We are plan to claim him as dependent under our tax filing but due to our own income we are not eligible of AOTC or other education credits. Also, I am mostly sure, he is not eligible for AOTC or other education tax credit if he file return as he is 20 yr old, and pay half of own expenses by himself. All education tax forms, 1098-T (for tuition), 529 payment, student loan interest (even no interest paid) came on his name. From his W2 he worked in summer, no federal tax was deducted and tax for IL State tax was deducted. 

So my questions are:

1. Do he need to file federal tax return?

2. As all 1098-T and 529 tax forms came on his name and tuition (and other eligible expenses) is much more than 529 reimbursement, do we need to show that in our tax filing?

3. As from W2, some of the IL State was deducted and based on his income, he may not need to pay IL Tax, he may get that as refund, can he file just IL State return without filing Federal return (guessing he not need to file federal return)? He will be claim on our State return too.

Thanks

[Hal_Al · Accepted solution]

Q1. Does he need to file federal tax return?

A1. No.  His income is below the filing threshold.

Q2. As all 1098-T and 529 tax forms came on his name and tuition (and other eligible expenses) is much more than 529 reimbursement, do we need to show that in our tax filing?

A2. No. When fully covered by expenses, the 1099-Q can be ignored. 

Q3. Can he file just IL State return without filing Federal return?

A3. Yes. If he uses TurboTax, he will have to prepare a federal return first (but doesn't have to file it), so the info will transfer to the state return. 

(guessing he not need to file federal return)? He will be claim on our State return too.

[AmyC · Accepted solution]

1. No, he does not need to file. See Dependent 

2. Since there is no taxable income and no education credit, you do not need to file those forms.

3. He is not required to file IL state since his income is below the personal exemption amount for tax year 2024 of $2,775.

He can enter his w2 on the free version and file federal (if desired) and state. See IL filing

[JayKP]

@Hal_Al Thanks for quick reply.

So even 1098-T and 529 reimbursement (1099-Q) came on his name, and tuition is more than 1099-Q, he does not need to file federal return at all because not enough income and fully covered education expenses. Am i understand correct?

[JayKP]

@AmyC Thanks,

Is that free version include State return too (as free)? His W2 showing about $80 ta deduction for State of IL, and to get that back, he need to file IL tax return, as his income is less than below the requirement.

[DianeW777]

Yes, Hal_Al is correct and a federal return is not required for your son because his income is below the filing requirement. He would file to receive a refund only on both federal and state.

Yes, for your son the free version would include the state return as well if qualified and TurboTax will let you know:

• TurboTax® Free Edition | $0 Fed. $0 State. $0 To File

Per @AmyC - He can enter his w2 on the free version and file federal (if desired) and state. See IL filing

[JayKP]

@DianeW777 

@AmyC 

one more question, as my son did not file tax return (IL or Fed) in 2024 (for yr 2023) as he did not work or had any other income. So is he still use this online version of TT? He did file Fed and IL in 2023 (for yr 2022). Only reason i am asking  as he did not file last year, he will not have AGI from last year which may needed during e-file.

Thanks

[LeticiaF1]

You will have to enter 0 for his AGI.

How do I find last year's AGI?

@JayKP