I am a resident of Delaware. My 21-year daughter is a full-time student in North Carolina. She lives off campus so she has a North Carolina address. I plan to claim her as a dependent for the next 2 years while she is in school. It's time to renew her car registration and we were thinking of switching it to North Carolina because she plans to stay there after graduation. If she registers her car in NC and gets an NC driver's license, will I still be able to claim her as a dependent? I'm still supporting her financially while she's in school.
Yes, you will still be able to claim her. Being away at school is considered a temporary absence.
Just an addendum for something unrelated that jumped out at me when I read it.
I'm still supporting her financially while she's in school.
There is no requirement for the parent to provide the student any support. Not one single penny. The support requirement is on the student, and only the student. That requirement is:
If the *STUDENT* did *NOT* provide more than half of their own support for the entire tax year, then the parent qualifies to claim that student as a dependent on the parent's tax return. Scholarships, grants, 529 distributions, gifts from Aunt Mary, money from mom and dad, and any other 3rd party income *DO* *NOT* *COUNT* for the student providing their own support. There are only two possible ways the student can have any claim to providing more than half of their own support.
1) The student is self-employed or has a W-2 job and makes sufficient *EARNED* income during the tax year to support a claim to providing more than half of their own support. Additionally, that earned income must be more than the total all of third party income received by the student during the tax year.
2) The student is the *PRIMARY* borrower on a *qualified* student loan, and sufficient funds were distributed to the student from that loan during the tax year to support a claim to providing more than half of their own support. Additionally, the funds distributed to the student during the tax year must exceed the total of all third party income received by the student in that same tax year.
Can dependent have their car which is titled in their name registered, insured and titled at their college address and still be a dependent for tax purposes if dependent doesnt provide more than 50% of their support? Some states won't cover you if you are in an accident unless you have insurance in that state.
@etrtca How your dependent's car is titled and/or insured has no bearing on whether you can claim your child as a dependent. Your issue regarding car insurance is not a tax question. And even if your child lives in another state, living away from home for school is considered to be a "temporary absence" so you still say on your tax return that the child lived with you when you claim the child as a dependent.
IRS interview to help determine who can be claimed:
https://www.irs.gov/help/ita/who-can-i-claim-as-a-dependent
https://ttlc.intuit.com/questions/3113432-who-can-i-claim-as-my-dependent
So even if your dependent's car is insured and registered in a different state then parents, the dependents' taxes would be filed in the same state as parents, and then they just file non resident to the state where they had earned income (where they went to college)?
There is nowhere on a federal tax return that you enter where your child's car is registered or insured.
The question is in regard to the dependent filling out their own state tax income tax form. Since they are a dependent they should fill out the state income tax form where their parents live even though they have earned income and have registered, insured and titled their car in the state that they go to school? Residency is determined by parents address and not by car registration or insurance?
Q. Can dependent have their car which is titled in their name registered, insured and titled at their college address and still be a dependent for tax purposes?
A. As the other answer already said, car ownership, registration and insurance ain't got nothing to do with income tax filing and dependency.
Q. So even if your dependent's car is insured and registered in a different state then parents, the dependents' taxes would be filed in the same state as parents, and then they just file non resident to the state where they had earned income (where they went to college)?
Q. Residency is determined by parents address and not by car registration or insurance or where the kid goes to school or earns money?
A. Simple answer: yes. If he/she qualifies as the parent's "qualifying child"* dependent, then the parent's address is his address and his residence for tax purposes.
So, yes the student may still have to file a non resident income tax form for any state he earns money in; but that is in addition to the resident income tax form he files for his (and the parent's) resident state. The resident state usually allows a credit for any tax paid to a non resident state. But, it also depends on what states are involved; reciprocal state rules my apply.
* 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, student status, a relationship test and residence test. The support test, for a QC, is only that the child didn't provide more than half his own support. The support test for a Qualifying Relative is that the taxpayer provided more than half the relative's support.