It sounds like xmasbaby has you on track for your situation, but I just want to add a few clarifications for future readers:
- There are circumstances where you CAN claim EIC if the child is not your dependent. A child would not qualify as your dependent if they pay for over 1/2 of their own support. But if that is the only reason whey they don't qualify as your "Qualifying Child", that would NOT disqualify you from claiming EIC based on that child. You can also choose to not claim him as a dependent, and still qualify for EIC for him.
- If a student can establish that they have PERMANENTLY moved out of the parent's home, that would mean they are not your dependent. But that is uncommon with college students, unless perhaps they have their own private, permanent, year-around housing.
- Even though your son is paying for his own expenses, it seems like he is NOT paying for over 1/2 of his own costs. Scholarships are considered as being paid from a 3rd party, so once you factor in the high cost of college and housing (being paid for by scholarships), he is not paying for over 1/2 of his own support.
However, for your situation is more complicated due the college scholarships and educational credits. The fact his full-ride scholarship is paying for housing means that portion of his scholarship is taxable. He may even want to 'force' MORE to be taxable so you could qualify for a refundable educational credit. Or if he owes taxes, you could choose to not claim him and then he could claim the non-refundable education credits to offset the tax he owes (he still can't claim himself though). In many cases a child with this type of scholarship could be subject to the "Kiddie Tax", but because your income is so low that isn't a problem. As you see, it can get quite complicated, so you and your son may want to go to a tax professional to figure out the best way for each of you to file.
