Q. The question is can my son be independent?
A. My opinion is that he cannot claim independent. For tax purposes, the real question is can anyone claim him as a dependent. If the answer to that question is no, then he can claim independent.
As previously stated, there are two types of dependents. He cannot be a qualifying relative because his income is too high. So we look to see if he can be a qualifying child (QC) dependent.
1. I assume he is under 24 and a full time student. He meets the QC age rule.
2. From your description, he does not provide more than half his own support (most of his support expenses are paid by scholarship). He meets the QC support rule.
3. Does he reside with the parent? When a student goes away for school, he is still considered as living with the parent, even if living off campus. Being away at school is only a temporary absence. "He was out of state for a summer internship" may introduce some fuzziness in that question, but I'm of the opinion that that is still only a temporary absence, and he resides with you. He meets the QC residency rule.
My opinion is that he cannot claim independent because he can still be claimed as your QC dependent. Note that it is not neccessary that you provided any of his support; only that he didn't provide more than half his own support. In most cases, like yours, this ia a good thing. The parent usually wants to claim the student. Why do you want the student to be able to claim independent. There's usually nothing to gain.
Q. Can he be indpendent one year and no the next?
A. Yes
Q. Can scholarship count as part of his support if it is very large?
A. Yes and no. Scholarship money is ignored. But the expenses it pays (tuition, room & board etc) are support not provided by the student. So, with a large scholarship, it would be nearly impossible for him to say he provided more than half his own support.
Q. His twin sister is filing first time and had loans that did count as her providing her own support. So she is independent?
A. That is correct, as long as the loans are solely in her name. If either parent is a co-signer, then that loan money is not considered her own support. Again, for most people, you don't want the student claiming independent. The parent misses out on the dependent credit and AOC and the student cannot usually claim either.
