Filing my taxes independently this year, but last year I was a dependent. Can my parents claim my 1098-T if they paid for my tuition when I was still a dependent?

[sun8]

April 2023 - My parents filed their taxes claiming me as their dependent because I was a college student and they were paying for my tuition. August 2023 - I graduated college, started working full time, and am completely independent from my parents.

April 2024 - I claimed myself on taxes but my parents want to claim my 1098-T because they paid for my tuition when I was still dependent on them. 

Can we both claim the 1098-T? Or does it belong to my parents? 

[DawnC]

Your parents can't claim the 1098-T unless they claim you as a dependent.   Since they did not claim you as a dependent on the 2023 tax return, you are the only one that can claim the 1098-T.   Some important tips about entering this form:

• Enter your 1098-T exactly as is, even if the amounts are wrong (this is common). You'll get a chance to correct this info and enter additional expenses later on.
• Leave blank boxes blank. Don't enter 0 for any blank boxes on the form, as this generates errors.
• Parents: If the student listed on the 1098-T is your dependent, enter the 1098-T on your return, even if your dependent paid the tuition.
• Students: If you're not being claimed as a dependent, enter the 1098-T on your return regardless of who paid the tuition, unless it was your employer. In that case, just keep the 1098-T with your tax records.

See this article for more information about how scholarships, fellowships, and grants are taxed.

[Hal_Al]

Q. Can my parents claim my 1098-T if they paid for my tuition when I was still a dependent?

A. No. There is no such thing as part year dependent. They cannot claim the 1098-T and the education credit, if you were not their dependent, for the whole  of 2023.

Q. Can we both claim the 1098-T? 

A. The credit for a student's education can only be claimed on one tax return. And that goes to the person claiming the student (either as a dependent or himself as independent). 

But, the real question is did you really not qualify as their dependent?

Can the student be claimed as a dependent in the Graduation year? (answer written as if the parent asked the question)

If he/she was a student (under 24) for parts of  5 months and lived with you for more than half the year, and did not provide more than 1/2 his own support for the whole year, you can still claim him. Be sure he knows you're claiming him, so he doesn't claim himself. He can only be claimed once. But, he can "file taxes" without claiming his own exemption.

The real question is who should be claiming him in this "transition" year to adulthood. You two have to agree on who is going to claim his exemption. Each should do their taxes both ways and see which way the family comes out best.  Even then, you have to meet the rules. 

There are two types of dependents, "Qualifying Children"(QC) and Other ("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, student status, a relationship test and residence test. Only a QC qualifies a taxpayer for the Earned Income Credit.

The rule is that a child of a taxpayer can still be a “Qualifying Child” dependent, regardless of his income, if:

1. he is a full-time student under 24 for at least 5 calendar months of the year (graduating in May usually means you meet the 5 month rule)
2. he did not provide more than 1/2 his own support  (scholarships are considered 3rd party support and not support provided by the student). 
3. lived with the parent (including time away at school) for more than half the year

So, it usually hinges on "Did he provide more than 1/2 his own support in 2023.

The support value of the home you provided is the fair market rental value of the home plus utilities & other expenses divided by the number of occupants. IRS Publication 501 on page 20 has a worksheet that can be used to help with the support calculation. See: http://www.irs.gov/pub/irs-pdf/p501.pdf  (page 15)

If he has already filed one way, he can file an amended return, going the other way.