When I am preparing my child's taxes who is 20 and a full-time student, turbo tax asks if she provided more than half her own support with earned income. She has almost no earned income, but she did provide half of her support (off-campus apartment, food and utilities when on campus) with unearned income. Why does it ask that question? I thought it doesn't matter if the support was from earned or unearned income.
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Tax requirements for dependent children are different from those of other taxpayers. A dependent child who has earned more than $14,600 of earned income (tax year 2024) typically needs to file a personal income tax form. Earned income includes wages, tips, salaries, and payments from self-employment.
I appreciate your response. So if my daughter had $20k of unearned income but $4k of earned income, but spent $15k for her support and her total support was $20k, I can not claim her as a dependent, correct? The question on turbo tax asked about half the support coming from earned income confused me, because I don't believe the determination of dependency matters if it is earned or unearned. Maybe that question relates to something else?
Yes, this is correct. If her total support for the year spent was $20,000 and she paid $15,000 toward her own support, you cannot claim her as a dependent because she paid for more than 1/2 of her own support.
You are also correct in stating that dependency is not determined by the types of income mentioned. This is relevant in determining rather she needs to file a tax return or not. Has nothing to do with dependency determinations.
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