claiming my child he lives rent free and i pay for his food which is more that his income. he pays for his college which is over 50% of his incom so he also claim himself

[altamura-jj]

why is was my return rejected when both statements are true for the tax credits

[CatinaT1 · Accepted solution]

Your son can not claim himself and you claim him as a dependent. 

Your tax return was rejected because a single Social Security Number can only be claimed once per tax year. Because your son already e-filed and claimed himself, the IRS computers immediately flagged your return as a duplicate and rejected it.

You mentioned that your son spends over 50% of his income on college. The IRS does not care what percentage of your son's income he spends. They only care about the Total Cost of Support for the entire year.

To figure out who legally gets to claim him, you have to add up every single dollar it cost to keep him alive and in school for the year.

Total Support includes:

• The Fair Market Value of his rent (what you would charge a stranger to live in his room)
• Groceries and eating out
• College tuition, books, and fees (Note: Scholarships do not count as support he provided)
• Car insurance, gas, medical bills, and clothing

Once you have that Total Support number, the IRS rule for a "Qualifying Child" is: Did the child provide more than half of their own Total Support?

Here is how the math breaks down for your two scenarios:

Scenario A: You get to claim him 

• Let's say the Fair Market Value of his free rent, food, and utilities comes out to $18,000 for the year. He earns $10,000 at his job and spends $6,000 of it on his tuition.
• Total Support: $24,000
• Your son only contributed $6,000 toward that $24,000 total. Since he did not provide more than 50% of his own total support, he remains your dependent. He was legally required to check the box on his tax return that says "Someone can claim me as a dependent." 

Scenario B: He gets to claim himself 

• Let's say his rent and food only equal $8,000 for the year, but he took out $15,000 in student loans in his own name to pay for his tuition. (Student loans count as support provided by the person whose name is on the loan).
• Total Support: $23,000
• Because his $15,000 contribution is more than half of the $23,000 total, he provided more than 50% of his own support. He is no longer your dependent, and you cannot claim him.

You will need to sit down with your son, calculate his Total Support for the year, and figure out whose contribution crossed that 50% threshold.

If your son paid more than 50% of his support, you must remove him as a dependent from your tax return and e-file it again.

If you paid more than 50% of his support, you must mail your tax return in on paper (since the electronic system is locked to his SSN). Your son will then have to file an Amended Return (Form 1040-X) to un-claim himself, which will likely mean he has to pay back some of the refund he already received.

[altamura-jj]

Thanks