There are two types of dependents, "Qualifying Children"(QC) and standard ("Qualifying Relative" in IRS parlance even though they don't have to actually be related). There is no income limit for a QC but there is an age limit, student status, a relationship test and residence test.
A child of a taxpayer can still be a “Qualifying Child” (QC) dependent, regardless of his/her income, if:
- He is under age 19, or under 24 if a full time student for at least 5 months of the year, or is totally & permanently disabled
- He did not provide more than 1/2 his own support. Scholarships are excluded from the support calculation
- He lived with the parent (including temporary absences such as away at school) for more than half the year
So, it doesn't matter how much he earned. What matters is how much he spent on support. Money he put into savings does not count as support he spent on him self.
The support value of the home, provided by the parent, is the fair market rental value of the home plus utilities & other expenses divided by the number of occupants.
The IRS has a worksheet that can be used to help with the support calculation. See: http://apps.irs.gov/app/vita/content/globalmedia/teacher/worksheet_for_determining_support_4012.pdf
@Overtaxedstudent; to answer your questions, you first need to determine if your qualify as your parent's QC dependent. Most students do. If that is your case:
Q. Are my parents required to claim me as dependent?
A. No. They are not required to. But they can and will get a $500 other dependent credit if they do. But, since they can claim you, you may not claim yourself. In TurboTax, you indicate that somebody else can claim you as a dependent, at the personal information section. TT will check that box on form 1040.
Q. Can I take the deduction myself?
A. No. If you can be a dependent, you cannot claim yourself. Actually there is no longer (since 2017) a dependent/taxpayer exemption (deduction). You may, however, claim a non-refundable tuition credit; even though your parents paid it, as long as they forego claiming the dependent credit.
Q. Can I file as a MA resident?
A. No. Since you are a student, who can be a dependent, you are considered a resident of your parent's state.
Q. If the answer to (2) is no, then what else would it take to be able to file in MA?
A. You must file a MA non-resident return, because you have MA source income. WA does not have an income tax. You must also file a NY resident return and pay tax on both your MA & WA income. NY will give you a credit (or partial credit) for tax paid to MA.
