I am a full-time graduate student, age 23, living with my parents. For the first half of the year, my income came from a W-2 stipend that counts as earned income. Halfway through the year, I started receiving a fellowship that is unearned income.
According to IRS instructions for Form 8615 (https://www.irs.gov/pub/irs-pdf/i8615.pdf), you only have to pay the kiddie tax if you don't have earned income equal to more than half of your support. My question is this: because of my stipend from the first half of the year, I do have earned income equal to more than half of my support, but I'm not actually providing more than half of my support. So do I have to file a form 8615 and pay the kiddie tax? If I read the instructions literally, it sounds like I don't have to, but I'm not sure. Also if it's relevant, tuition and fees are waived for my graduate program, so I have no cost of education to factor into my support.
The tax difference is significant (about an extra $5,500 for the kiddie tax). But its not clear. Can I be a dependent since I'm not providing more than half of my support, but also not have to file form 8615 and pay this extra tax because I do have earned income equal to more than half of my support?
I appreciate any clarification anyone can give...
