topic 21yo daughter attends a degree-granting college, but the school does not issue a 1098-T, because it does not receive funding from the gov't. Should she file independent? in Education

21yo daughter attends a degree-granting college, but the school does not issue a 1098-T, because it does not receive funding from the gov't. Should she file independent?

chisle — Tue, 04 Jun 2019 18:41:19 GMT

The school is ineligible for 1098-T because it is not eligible to participate in a student aid program run by the U.S. Department of Education (they don't want strings attached).

So, If I use TT, and state that she is a dependent, and we pay most of her expenses, but she's not at an eligible institution, would it be better for her instead to file as independent, and we drop her off as a dependent on our taxes?

Trying to figure out the best financial situation here. She earned in excess of 12k in '17.

Thank you.

Neither you nor she can claim a tuition credit, because t...

Hal_Al — Tue, 04 Jun 2019 18:41:21 GMT

Neither you nor she can claim a tuition credit, because the school is not an "eligible institution"*.

So, no, you should not drop her from your return.

A child of a taxpayer can still be a “Qualifying Child” (QC) dependent, regardless of his/her income, if:

1. 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

2. He did not provide more than 1/2 his own support. Scholarships are considered third party support and not as support provided by the student.

3. He lived with the parent (including temporary absences such as away at school) for more than half the year

So, it doesn't matter how much he earned. What matters is how much he spent on support. Money he put into savings does not count as support he spent on him self.

The support value of the home you provided is the fair market rental value of the home plus utilities & other expenses divided by the number of occupants.

Furthermore, there is a rule that says IF somebody else CAN claim him as a dependent, he is not allowed to claim his own exemption. If he has sufficient income (usually more than $6350), he can & should still file taxes; he just doesn’t get his own $4050 exemption (deduction). In TurboTax, he indicates that somebody else can claim him as a dependent, at the personal information section.

Even if he had less, he is allowed to file if he needs to get back income tax withholding. He cannot get back social security or Medicare tax withholding.

*Enter your school at the link below, to verify if it's not on the dept. of education list.

https://fafsa.ed.gov/FAFSA/app/schoolSearch?locale=en_EN

The fact that she lived with us for more than 6mos and th...

chisle — Tue, 04 Jun 2019 18:41:22 GMT

The fact that she lived with us for more than 6mos and that 'putting money in savings' is not the same as supporting self clarified this for me.

Thank you.