It is extremely rare for an undergraduate college student to provide more than half of their own support.... even if that student earned a million dollars during the tax year. There are only two possible ways a student can provide more than half of their own support.
- The student had a job or was self-employed and was paid a sufficient amount in the tax year that is in excess of the total of all third party support. (scholarships, grants, 529 distributions, gifts from Aunt Mary, money from parents, etc.)
- The student is the "PRIMARY" borrower on a *qualified* student loan that the parents did NOT co-sign, and a sufficient amount of funds was distributed to the student during the tax year, that is in excess of all third party support received during the tax year.
Additionally, all costs must be "reasonable". For example, if an undergraduate claims they paid $5000/mo for a penthouse suite so they could be close to the college they attended, that is not reasonable for a college student by any stretch of the imagination.
If the student received $100,000 of scholarships, grants and 29 distributions, there is no way on earth you'll ever convince the IRS that it costs you more than $200,000 for the year (including tuition costs) to attend college. So in a case such as that, even if you earned a million dollars you still could not have provided more than half of your own support at "reasonable" cost. Such a claim would be audited and disallowed by the IRS.
