@avjunior wrote:
And adding to this is both resident and nonresident forms have identical filing status sections where box 1 says "If you can be claimed on another person's tax return, use Filing Status 6."
If you are using software, leave it alone. The software programmers work with local tax law experts and each entity (state or IRS) will not allow the software to e-file unless it conforms to all their rules.
If you are preparing your return on paper, follow the forms and instructions. Don't try to interpret the law, unless you are a lawyer, and are prepared to go to court to challenge the slight difference in wording you have uncovered. If audited, you will lose from square one, and will be fighting an uphill battle all the way.
It is a simple fact that, across the federal Congress and state governments, tax benefits are rarely provided to someone who is supported by someone else.
We could ask, as a threshold matter, does your child qualify to be claimed as a dependent? If she is a full-time student under age 24, the two salient questions are,
1. Does she live in your home, and
2. Does she support herself?
For the live at home question, being away at college is considered a temporary absence and she still "lives at home" for tax purposes. However, sometimes a child will move out into their own apartment, and if they have no intention of returning to their parents home on summer break or after college, they can be considered to live away from home. Intent is important. Living in an apartment because it's cheaper than the dorm but you visit your parents over the summer does not show intention to move out of your parents home permanently. But moving in with a fiancé or getting married, and taking most of your stuff out of your parents house, does demonstrate intent. If the child lives (or is considered to live) in your home less than 183 days, and they have more than $4700 of taxable income, they don't qualify as a dependent.
For the support question, be aware that student loans taken out in the child's name counts as support they provide themself. (However, scholarships are ignored for this support question.) If you add up all the support the child provides themself (expenses paid from wages, savings, or loans) and compare them to the child's total cost of living (including room and board at college, room and board at your home over the summer, entertainment, travel, medical, clothing, tuition, books, etc, -- does the child provide more than half their own support. If so, they don't qualify as your dependent.
Consider carefully if your child qualifies as a dependent. But if she does, you just have to deal with the consequences.
