Here's my take on this. To qualify as your dependent, the child/student must meet 5 criteria.
- Relationship
- Age
- Residency
- Support
- Joint return
Relationship is not questioned here.
Age is questioned. The rule reads (paraphrased) "must be under the age of 19 on Dec 31 of the tax year, *OR* Under the age of 24 and enrolled as a full time student for any one semester that started during the tax year."
We need to define what the IRS calls a "full time student". IRS Publication 17, page 28 at https://www.irs.gov/pub/irs-pdf/p17.pdf reads:
Student defined. To qualify as a student, your child must be, during some part of each of any 5
calendar months of the year:
1. A full-time student at a school that has a regular teaching staff, course of study, and a regularly enrolled student body at the school; or
2. A student taking a full-time, on-farm training course given by a school described in (1), or by a state, county, or local government agency.
The 5 calendar months don’t have to be consecutive.
Based on that, it is of my opinion they qualify as your dependent, even though they have more than $4,300 of *EARNED* income for the year.
For the "support" requirement, if the above holds water, there is no requirement for the parents to provide a qualifying student any support. Not one single penny. The support requirement is on the student, and only the student. That requirement reads, "If the STUDENT did NOT provide more than half of THEIR OWN support during the tax year, then the parents qualify to claim that student as their dependent.
There are only two possible ways the student can provide more than half of their own support.
1. The student is self-employed or has a W-2 job and earned sufficient funds to justify a claim to providing more than half of their own support. Monies earned by the student must exceed the total 3rd party income received by the student during the tax year. 3rd party income includes scholarships, grants, 529 distributions, and any other income received by the student or on behalf of the student from any other source, including the parents. 3rd party income does *not* count for the student providing their own support.
2. The student is the *primary* borrower on a qualified student loan and sufficient funds were distributed by the lender during the tax year to justify a claim to providing more than half of their own support. Monies distributed to the student must exceed the total 3rd party income received by the student during the tax year. 3rd party income includes scholarships, grants, 529 distributions, and any other income received by the student or on behalf of the student from any other source, including the parents. 3rd party income does *not* count for the student providing their own support.
If the above does not hold water, then your child would fall under the "Qualifying Relative Dependent" rules, and would not qualify as your dependent since they have more than $4,300 of earned income for the tax year.
