Q. Can I claim my son as a dependent if he is on an Athletic Scholarship?
A. Yes.
Q. Does the 25k he receives from his scholarship count as him providing support for himself?
A. No. In simple terms, it is third party support and not support provided by either the student or the parent. Technically scholarships are excluded from the support calculation*.
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. Only a QC qualifies a taxpayer for the Earned Income Credit and the Child Tax Credit. They are interrelated but the rules are different for each.
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.
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. Note that the support test, for a QC, is only that the child didn't provide more than half his own support.
- He lived with the parent (including temporary absences such as away at school) for more than half the year
*Scholarships and support https://ttlc.intuit.com/community/college-education/discussion/re-calculating-support-with-scholarsh...
