@Carl wrote:
Some things to note about the requirements:
- The student's earnings do not matter. The student could earn a million dollars and still qualify as your dependent.
- There is no requirement for the parents to provide the student any support. Not one single penny. The support requirement is on the student, and *only* the student.
- Third party income such as scholarships, grants, 529 distributions, gifts from Aunt Mary, money from mom and dad, etc, *DO* *NOT* *COUNT* for the student providing their own support.
" - The student's earnings do not matter. The student could earn a million dollars and still qualify as your dependent."
Well, that's a bit of an exaggeration. The exact wording is:
The child must not have provided more than half of his or her own support for the year.
For the child to earn a million dollars and not provide more than half their own support, they must have a hell of a lifestyle, or they're sending all their money to charities and child support and not spending anything on themselves.
The broader point is that if the child does not support him/herself at least 50.1%, you can claim them as a dependent, even if you don't provide support. (It is enough that the child lives with you.)
Most of the time, tuition is a big enough expense that the child does not support him/herself more than half. However, while scholarships and gifts don't count as support the child provides themself, student loans the child takes out in the child's name do count as support the child provides themself. So in some cases, if the child has high earnings and is borrowing a lot for school, it might add up that the child pays more than half their own support.
