topic college student dependent of divorced parents in Deductions & credits

college student dependent of divorced parents

Anonymous — Sun, 29 Nov 2020 03:11:48 GMT

My step-son recently turned 18 in May 2020 and started college as a full-time student in the fall. His parents are divorced and we normally claim him but I know since he turned 18 the divorce decree doesn't matter. He lived with his mother more but we paid more financially for his care. My question is since the IRS states " If a child is emancipated under state law, the child is treated as not living with either parent" , who claims him? The parent he lived with more or the parent that supported him more? I have read on many different law sites it is the parent that pays more than half of the support but I cant find the regulation in any IRS publication.

Re: college student dependent of divorced parents

Critter-3 — Sun, 29 Nov 2020 13:14:24 GMT

The dependent rules still stand ... the custodial parent rules still stand.

IRS interview to help determine who can be claimed:

https://www.irs.gov/help/ita/who-can-i-claim-as-a-dependent

https://ttlc.intuit.com/questions/3113432-who-can-i-claim-as-my-dependent

There are two rules to claim someone as a dependent on a tax return, either the Qualifying Child rules or the Qualifying Relative rules.

Who can I claim as my dependent?

You can claim a child, relative, friend, or fiancé (etc.) as a dependent on your 2018 taxes as long as they meet the following requirements:

Qualifying child

They are related to you.
They aren't claimed as a dependent by someone else.
They are a U.S. citizen, resident alien, national, or a Canadian or Mexican resident.
They aren’t filing a joint return with their spouse.
They are under the age of 19 (or 24 for full-time students).
- No age limit for permanently and totally disabled children.
They live with you for more than half the year (exceptions apply).
They didn't provide more than half of their own support for the year.

Qualifying relative

They don't have to be related to you (despite the name).
They aren't claimed as a dependent by someone else.
They are a U.S. citizen, resident alien, national, or a Canadian or Mexican resident.
They aren’t filing a joint return with their spouse.
They lived with you the entire year.
They made less than $4,150 in 2018 ($4,250 in 2019).
You provided more than half of their financial support.

When you add someone as a dependent, we'll ask a series of questions to make sure you can claim them.

Related Information:

There is no such thing in the Federal tax law as 50/50, split, or joint custody. The IRS only recognizes physical custody (which parent the child lived with the greater part, but over half, of the tax year. That parent is the custodial parent; the other parent is the noncustodial parent.)

Who can claim the exemption and credits depends on who is the custodial parent. (By the IRS definition of custodial parent for tax purposes - this is not the same as the custody that a court might grant.).

The test that the IRS uses to determine the custodial parent is where the child lived for more than 1/2 (or greater part) of the year. The IRS will go so far as to require counting the nights spend in each household - that person is the custodial parent for tax purposes (if exactly equal and more than 183 days - The custodial parent is the parent with the highest AGI, if less than 183 days then neither parent has custody). That can usually only occur if both parents lived with the child at the same time. And yes they are that picky.

The custodial parent may claim everything child related UNLESS they waive the dependency exemption to the non custodial parent via a form 8332.... in that case the child may be used on 2 separate returns but only in the following way :

Only the Custodial parent can claim: (Child would be listed as non-dependent EIC & CC only)
-Head of Household
-Earned Income Credit
-Child Care Credit

The non custodial parent can only claim: (Child would be listed as dependent)
-The Exemption
- The Child Tax Credit

See Special rule to divorced or separated parents (or parents who live apart) on page 32:
https://www.irs.gov/pub/irs-pdf/p17.pdf

But only if specifically specified in a pre-2009 divorce decree, separation agreement or the custodial spouse releases the exemption with a signed 8332 form - after 2009 the IRS only accepts a signed 8332 form that must be attached to the non-custodial parents tax return.

Re: college student dependent of divorced parents

Hal_Al — Sun, 29 Nov 2020 22:29:40 GMT

The simple answer to your question is: The parent he lived with more .

" If a child is emancipated under state law, the child is treated as not living with either parent" is irrelevant in your case . Emancipation simple means that the "special rule" for divorced and separated parents no longer applies*. That is, he can no longer be the father's "qualifying child" and the father could only claim him under the "qualifying relative rules".

The other answer supplies the rules; but one rule is missing: The potential dependent cannot be the qualifying child of another taxpayer.

Since the child (he's under 24, so for taxes, he's still a child even if emancipated) lives with his mother, he is her "qualifying child", unless he is providing more than half his own support. Of course, if he's providing more than half his own support, you could not be proving more than half his support and therefore would not meet the support test for a qualifying relative. Scholarships are considered third party support and not support provided by the student. Student Loans are considered the child's own support, unless a parent co-signs.

* An emancipated person is not longer in anybody's "custody". But, the mother can continue to claim the child as a qualifying child, for tax purposes, because the child still resides with her. But, the father not only needs the mother to not claim the child, he needs to meet the qualifying relative dependent support and income test. It is not enough to have paid more than the other parent. You must have paid more than half his total support. The "splitting" of the tax benefits is no longer allowed.

The custodial parent can no longer release the dependency to the non-custodial parent with form 8332, if the child is emancipated. In practice, this technicality is widely ignored (or unknown) by divorced parents.

Re: college student dependent of divorced parents

rjs — Mon, 30 Nov 2020 01:32:37 GMT

@Anonymous wrote:

who claims him? The parent he lived with more or the parent that supported him more? I have read on many different law sites it is the parent that pays more than half of the support but I cant find the regulation in any IRS publication.

"The parent that pays more than half of the support" applies only to a dependent who is a qualifying relative, not to a qualifying child. But as Hal_Al explained, your stepson is "the qualifying child of another taxpayer" (his mother). Since he is someone's qualifying child, he cannot be a qualifying relative of anyone, including his father or you.

The conclusion is that the mother can claim the son as a dependent, and you and your husband cannot claim him, even if you provide more than half of his support.