Q. Does it make a difference if the tax-free/taxable financial aid is a pell grant when determining if its student self support?
A. No.
Q. Or are Pell grants considered scholarships whether it’s taxable or tax-free?
A. Yes.
Q. Therefore a tax-free or taxable scholarship/pell grant/off campus scholarship is not considered as her providing her own support?
A. Yes
Q. The majority of her total expenses for the year would’ve been covered by scholarship/pell grant. Yet, we can still claim her as a dependent even though the majority of her expenses are paid from taxable and tax-free scholarship/pell grant?
A. Yes.
The rule is: for the support calculation, you ignore the scholarship money and everything it pays for. You count only the support provided by other money.
The rule was written that way specifically, for people in your situation. Scholarships do not prevent the parent from claiming the student as a dependent.
