criteria from a 19 year old to file independently

[KalmanF]

19 year old wanting to file independently. Do I have to have provided more than half my support? And if so, can it be from un-earned income, or does it have to be earned income?

[xmasbaby0]

What the 19 year old wants may be irrelevant if he meets the criteria to be claimed.  The rule is that if he CAN be claimed he must say on his own return that he can be claimed as someone else's dependent.  Are you the parent?   You need to see if you CAN claim him, and he must answer accordingly on his own tax return when asked if he can be claimed.

IRS interview to help determine who can be claimed:

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

WHO CAN I CLAIM AS A DEPENDENT?

You can claim a child, relative, friend, or fiancé (etc.) as a dependent on your 2024 taxes as long as they meet the following requirements:

Qualifying child

• They're related to you.
• They aren't claimed as a dependent by someone else.
• They're a U.S. citizen, resident alien, national, or a Canadian or Mexican resident.
• They aren’t filing a joint return with their spouse.
• They're under the age of 19 (or 24 for full-time students).
• No age limit for permanently and totally disabled children.
• They lived 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're 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 (exceptions apply).
• They made less than $5050 in 2024 (not counting Social Security)
• 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. There may be other tax benefits you can get when you claim a dependent.

• What does "financially support another person" mean?

[KalmanF]

Thank you for your reply.   I  understand that if he can be claimed by myself (the parent) he would have to indicate that and he wouldn't be able to file independently.

What I am encountering is that he has provided his own support via stock capital gains, dividends etc of his own money.  However, TurboTax is saying that I have to claim him (or more specifically, he will be taxed at my rate) since he has no EARNED income.  is this correct?  is that the law?

[xmasbaby0]

You are asking about the "kiddie tax"

https://ttlc.intuit.com/turbotax-support/en-us/help-article/small-business-processes/2021-kiddie-tax...

[Hal_Al]

Q. However, TurboTax (TT) is saying that I have to claim him (or more specifically, he will be taxed at my rate) since he has no EARNED income.  is this correct?  is that the law?

A.  Yes, TT is ONLY saying he will be taxed at your rate. Yes, that is correct and is the law. And, it is because of the unearned income.  He cannot be your dependent because he provided more than half his own support. But, he is taxed at your rate  because of the unearned income.  Application of the "Kiddie tax" is not only related to being a dependent.  A full time student, under 24, who does not get more than half his support, from his own earned income, is subject to the kiddie tax, even if is not and can not be a dependent.

Just because he has a lot of unearned income, does not mean he cannot be your dependent. It's not how much income he has, it's how that income is spent that counts.  The money he puts back into savings and investments is not counted as support. 

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

The IRS has a worksheet that can be used to help with the support calculation. See: http://apps.irs.gov/app/vita/content/globalmedia/teacher/worksheet_for_determining_support_4012.pdf

[KalmanF]

Thank you very much for your answer.  very complete and makes sense.  What about the same situation, 19 years old, has NO earned income, a lot of unearned income, and is NOT a student {or more accurately, he is in a school that is not recognized as a credentialed school in any way.  kind of like a religious study group]

Thank you very much!!

[Hal_Al · Accepted solution]

No. Full time student is a criteria for the kiddie tax.  He was a full-time student for 2024 if during any part of any 5 calendar months during the year you were enrolled as a full-time student at an eligible educational institution, or took a full-time, on-farm training course given by such an institution or by a state, county, or local government agency.

Incidentally, if he does not support himself with his own earned income, he is not eligible for the refundable portion of the most generous of the tuition credits.  However, if he has a tax liability from that investment income, he is eligible for the non refundable credit (up to $2500), if he is not claimed as a dependent. 

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