Claiming child as dependent after 18

[ZachV]

For my 2024 taxes, I am trying to determine how much money my son can make so that I can claim him as a dependent, along with several credits. He is 21 years old and will have been a full-time college student for 2024, and I provided more than 50% of his income, including college intuition.

If he were to make over $5050 as a self-employed, would I be able to still claim him as a dependent. If I am still able to claim him as a dependent if he makes over $5050, would I still be able to claim the American Tax Opportunity Credit and Earned Income Tax Credit (EITC)  granting our AGI is below $160,000 or would making over that amount block me from claiming either of those two credits. Finally, are there any other credits I could claim or miss if he makes over that amount?

[DoninGA]

Since he is a full time student under the age of 24 and does not provide for over one-half of his own support you should be able to claim him as a dependent under the Qualifying Child rules if he meets all the other requirements.

To be a Qualifying Child -

1. The child must be your son, daughter, stepchild, foster child, brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant of any of them.
2. The child must be (a) under age 19 at the end of the year, (b) under age 24 at the end of the year and a full-time student or (c) any age and permanently and totally disabled.
3. The child must have lived with you for more than half of the year. Temporary absences while away at college are considered living with you.
4. The child must not have provided more than half of his or her own support for the year.
5. If the child meets the rules to be a qualifying child of more than one person, you must be the person entitled to claim the child as a qualifying child.
6. The child must be a U.S. citizen or U.S., Canada or Mexico resident for some portion of the year.
7. The child must be younger than you unless disabled.

If you claim him as your dependent under the Qualifying Child rules then any education expenses for him will be entered on your tax return for the AOC.

You would be eligible for the EIC with him as your child if you qualify for the credit based on your income and filing status.  Go to this IRS website that has the EIC tables for tax year 2024 - https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/earned-income-and-earned...

[DoninGA]

If you claim him as a dependent, he will have to file his own tax return since he has self-employment income of $400 or more and on his tax return he will need to indicate that he can be claimed as a dependent.

[rjs]

You said "I am trying to determine how much money my son can make so that I can claim him as a dependent."

If your son meets all the requirements for you to claim him as a Qualifying Child, as DoninGA suggested, then there is no limit to how much he can make. However, he must not provide more than half of his own support for the year. The $5,050 income limit (for 2024) is for a Qualifying Relative, not a Qualifying Child.

Support is not the same as income. Support is money paid for housing, food, clothing, education, medical care, transportation, etc. If your son makes $10,000 and puts it in the bank or invests it, that is not support that he provided.

[ZachV]

Got it, thank you. He already knows how to file his taxes, but we wanted to make sure that he marks dependent on his, and I marked it on mine so that I could claim the credits. 

[xmasbaby0]

You asked about the earned income credit and mentioned having an income below $160K----your income would have to be much lower than that to get EIC----try the EIC assistant for 2023 just to get an idea of the income level that would get EIC for 2023---2024 will be similar.

https://ttlc.intuit.com/questions/1899157-what-are-the-qualifications-for-the-earned-income-credit-e...

https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/use-the-eitc-assistant

[Opus 17]

The income test for a child age 19 or older who is not a full time student is simple, $5050. 

There is no income test for a child between the ages of 19 and 24 who is also a full time student, there is a support test.  The support test asks, does the child pay more than half of their own support.  The child's support includes their living expenses (room and board), clothing, travel, entertainment, medical and tuition.  And it's not about income, but about how it's used.  Your child could (in theory) earn $100,000, but if they invest it all, and you pay their room and board, tuition and other expenses, then they are not providing more than half their own support.  (Of course, if the IRS sees that kind of income, they may ask you to clarify.)

For a child in college, tuition loans in their name counts as support they provide to themselves, since they have to eventually pay it back.  You may provide cash support to your child in the form of tuition, room and board, or health insurance from the school.  You can also count a percentage of your household expenses (rent or mortgage, food, utilities) as support you provide to your child if your child still has their permanent home in your home.  Because of the tuition loan issue, it is possible for a child to "provide more than half their own support" if they have substantial loans, even if they also have support from their parents.  It's something you have to add up and check. 

[Hal_Al]

There are two types of dependents, "Qualifying Children"(QC) and Other ("Qualifying Relative" in IRS parlance even though they don't have to actually be related). There is no income limit for a QC but there is an age limit, student status, a relationship test, support test, and residence test.

The support test is different for each type. The support test, for a QC, is only that the child didn't provide more than half his own support. The support test for a Qualifying Relative is that the taxpayer provided more than half the relative's support.

If he qualifies as your dependent, then you (not him) claims the American Tax Opportunity (education/tuition) Credit.

If he qualifies as a qualifying child dependent, you also get to claim the EITC, if your income is low enough ($66,819 not $160,000*). 

*See https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit/earned-income-and-earned...