Q. How does all of this work when multiple people support a student, but no one contributes more than half?
A. There are two types of dependents, "Qualifying Children"(QC) and Other ("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*.
The support test is different for each type. The support test, for a QC, is only that the child didn't provide more than half his own support. The support test for a Qualifying Relative is that the taxpayer provided more than half the relative's support.
Q. 1) Can I, and if so should I, claim him as a dependent?
A. Probably not. The numbers you provided appear to indicate that he provides more than half his own support (11,000 + 17,000 is more than $14,000 + 11,500). But, 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
Q. If I can’t, then can he take education deductions that I can’t?
A. Yes, technically. But, probably not. Since the AOC has already been claimed 4 times, that only leaves the LLC, which is a non refundable credit. And, if his tuition was paid by 529, you can't double dip. But, the aunt can claim the 529 was used for room & board to reduce the taxable portion. It doesn't matter that your money went to R&B. All that matters is that there was R&B expense in the same calendar year as the 529 withdrawal. The income limit for the LLC was raised, for 2021, and is the same as AOC. He can take nearly the full $12,550 standard deduction whether he's a dependent or not, as the internship should be earned income $12,000 + 350 = 12,350 standard deduction).
Q. Or is he precluded from claiming these things because I potentially can?
A. Technically yes. But once the "does he provide more than half his own support" question is answered, that's moot.
Q. Do I check no on his return even though he did not contribute more than half his own support?
A. No. You check no only if he did provide more than half his own support.
*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
