It seems I can't claim him as dependent
More than likely your assumption on that is incorrect. Please note the following on a student qualifying as a dependent.
- THere is no requirement what-so-ever for the parents to provide the student any support. Not one single penny. The support requirement is on the student, and only the student. That requirement is:
"If the student did not provide more than 50% of the student's own support, then the parents qualify to claim that student on the parent's tax return. If the student will be filing a tax return then the student "must" select the option for "I can be claimed on someone else's return"."
The key word here is *QUALIFY*. So even if the parents don't claim the student, it doesn't matter. If the student "qualifies" to be claimed on the parent's return then the student *MUST* select the option for "I can be claimed on someone else's return" when the student completes their own return if required.
- The student's earnings do not matter. The student could earn a million dollars and still qualify as a dependent on the parent's tax return.
- There are only two possible ways a student can provide more than 50% of their support.
1. The student has a W-2 job or is self-employed and earns sufficient amount to provide more than half their own support and actually *does* provide more than half of their own support.
2 - The student is the *primary* borrower on a qualified student loan, and sufficient funds are distributed by the lender to the student in a tax year, in an amount that would enable them to actually provide more than half of their own support.
Now, even with the above two items, it's still perfectly possible for the student to *not* provide more than half of there support *no* *matter* *what* they do. As an example, scholarships, grants, 529 distributions, gifts from Aunt Mary, etc., are all considered third party support. So if the student receives $50,000 in scholarships in a tax year, yet their qualified education expenses are only $20,000, that leaves $30,000 of "third party support" for the student. Since the qualified education expenses are also a part of the student's support, that would mean the student would have to spend $50,000 *of their own money* on support, in order to claim their provided more than half of their own support.
There's no way one can justify spending $100,000 or more in a tax year on support for an undergraduate college student. So this is one (of many) possible ways a student can earn a million dollars, yet still qualify to be claimed as a dependent on the parent's tax return.
