I have posted similar question last year but I did not get clear answer. Again same confusion of should I add him as dependent in my tax or not. Here are the details.
1. My 21 years old is in college.
2. He has some income from college working in the lab.
3. Has interest from his investment on his name.
4. He is the beneficiary for 529 payment he used for college.
When I claim him in my tax as dependent or not, there is no difference in my tax. However, in his tax, he has to pay tax if he is on tax return.
Is there a rule that he has to be on my tax? His total income is less than 8k.
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Not that he has to be on your return, the question is can someone claim you.
1. In college, probably qualifies as your dependent. Take this quick quiz, Dependent - Who can I claim?
2. He may not be required to file a return. See Filing requirement - scholarship income counts
3. The investment income might be subject to the kiddie tax. See What is the Kiddie Tax?
4. The 529 isn't entered unless it isn't all used on 529 qualified Room and Board and Qualified Education Expenses - Internal Revenue Service.
5. The problem is on his return, the question is can someone claim me - not even that you will claim but could. Just the fact that he isn't providing over half of his own support. See IRS Worksheet for Determining Support
If your income allows you to claim the education credit, it could be worth claiming him and giving him a little more income - from scholarship or 529, if necessary. What You Need to Know about AOTC and LLC. The IRS has a great brochure that explains how scholarships and tax credits interact.
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