There are only two possible ways a student can lay any claim to providing more than half of their own support.
1. The student is self-employed or has a W-2 job that earns them sufficient income to support a claim of providing more than half of their own support. The earned income must be more than the total of all third party support (scholarships, grants, 529 distributions, Gift from Aunt Mary, money from mom and dad, etc.) received from all sources during the tax year.
2) The student is the *PRIMARY* borrower on a *qualified* student loan and sufficient funds were distributed to the student during the tax year to support a claim of providing more than half their own support. Additionally, the amount distributed from the loan during the tax year must exceed the total of all third party support (clarified above) received from all sources during the tax year.
Even if one or both of the above are true, it's still possible for the student to qualify as a dependent on the parents tax return. If you'll note, there is *NO* limits on the student's earned income, or borrowed money. The student could earn a million dollars (literally!) and still qualify as a dependent on the parent's tax return.
This is because this is based on "support", not income. The support costs also have to be reasonable. For example, if the student earned $100,000 during the tax year, and also received $80,000 in scholarships, grants, 529 distribtions, etc, that would mean the total cost of support for the student for the entire tax year would have to exceed $160,000. That is not going to fly with the IRS for an undergraduate student for just one year. I don't care where the student may be attending college on this planet.
In other words, costs have to be reasonable. So no $5000/mo penthouse suites with steak and eggs for breakfast and steak and lobster for lunch and dinner everyday as they take their high cost chauffeured limousine to class each day.
Yeah, it sounds ridiculous. But you get the point. 🙂
