There is a common idea that a parent can decide not to claim a dependent so that they can reap certain benefits. The truth is, a qualifying child or a qualifying relative is your dependent.
While the IRS never comes out and says that you must claim a dependent, they do give the definition of who is a dependent.
The term “dependent” means:
- A qualifying child, or
- A qualifying relative.
While you can choose not to claim your dependent, the qualifying person MUST indicate on his own return that he is a dependent, but that no one will actually claim him as such.
In TurboTax Online, the questions read:
Someone else can claim me as a dependent on their tax return. You would answer yes.
And this person will claim me on their 2021 tax return. You would answer no.
Sometimes a parent will not be able to take advantage of an Education Credit and will forgo claiming the dependent so that they can get the credit. This will not necessarily work out. A student, under the age of 24, must have a tax liability in order to claim the non-refundable portion of the credit.
When using the ITA that the IRS provides, you can be told that you are eligible, but can't take the refundable portion in any of the following circumstances.
You are eligible to claim the American Opportunity Credit.
However, you cannot claim any part of the American Opportunity Credit as a refundable credit on your tax return since:
- you were over age 18 and under age 24 at the end of 2021,
- you were a full-time student,
- your earned income was less than one-half of your support,
- at least one of your parents was alive at the end of 2021, and
- you are not filing a joint return.
