Q. I am seeing posts saying that even if they qualify as dependent, the parents don’t necessarily have to claim them as dependent.
A. Yes that's true and there's even a situation where you might want to do that . But if he qualifies as your dependent, he still must check the box that says that, on his return, and that limits what he can claim (no stimulus!)
Q. Would it save more if the parents claim the student or to not claim?
A. It appears that the family will come out ahead, if he is not claimed as a dependent.
Q. If the unemployment of 31,000 counts as unearned income , that doesn’t affect the qualifications to be considered dependent does it?
A. No. It's not the source of the income or even the amount that governs dependency. It's how the money was spent. College expenses are support (except if paid by scholarship).
Q. Is it possible for the student to file their own return but still be claimed as a dependent?
A. Yes. Answered above. He can and must file a return. He checks the box that says he can be claimed as a dependent.
Q. Would there be any benefits to not claiming them while they still file their own return?
A. It's complicated, but basically answered in the first question.
Q. I’m still overwhelmed with all the different rules.
A. You need to run the support calculation, to see if he still qualifies as your dependent and file accordingly.
http://apps.irs.gov/app/vita/content/globalmedia/teacher/worksheet_for_determining_support_4012.pdf
