"So, since I turned 18, my parents have not claimed me on their taxes. While in college I have stayed at home so I have always selected YES on the box for potential to be claimed as a dependent".
Its sounds like either you or your parents have been missing out on some tax breaks. If you check that box,, it usually prevents you from claiming the tuition credit. Your parents coulda been claiming your exemption or dependent credit, earned income credit and tuition credit. They and/or you should be looking at possibly filing amended returns.
A child of a taxpayer can still be a “Qualifying Child” (QC) dependent, regardless of his/her income, if:
- He is under age 19, or under 24 if a full time student for at least 5 months of the year, or is totally & permanently disabled. Note that turning 18 was not a disqualifying event.
- He did not provide more than 1/2 his own support. Scholarships are considered third party support and not as support provided by the student.
- He lived with the parent (including temporary absences such as away at school) for more than half the year
So, it doesn't matter how much he earned. What matters is how much he spent on support. Money he put into savings does not count as support he spent on him self.
The support value of the home, provided by the parent, is the fair market rental value of the home plus utilities & other expenses divided by the number of occupants.
