I have a few questions regarding this scenario.
1. My son graduated college last May, if I do NOT claim him, I believe he can get some stimulus money back as he is now on his own since June and working. Our AGI will be in the $160K range, we claimed 3 people on husbands W2 (on other daughter in college). Can we NOT claim him, or are we penalizing our return for his sake?
3. If we claimed 3 exemptions, can that be myself, husband (breadwinner) and other college student. It didnt have to be another dependent instead of the breadwinner, correct?
2. Can two dependents claim the American Opportunity Tax Credit? I think so, but phases out at $160k perhaps.
3. If our AGI is not at $160K, can we claim stimulus from last year? Our income is definitely a bit less (we just missed it last year at $165K)
Thank you
My son graduated college last May,
What was your son's age on Dec 31, 2021? If over the age of 23 *and* he had more than $4,300 of earned income, you don't have a choice here and you can not claim him.
If your son qualifies to be claimed as a dependent on your return, then he MUST indicate on his return that he can be claimed as a dependent - REGARDLESS of whether or not you actually do claim him.
Thank you
He was 23 in September and over $4300 earned income.
Right, that's the issue. Based on my income, and his situation (23 in Sept/earned income over $4300), can he just claim himself or does my income level make it more beneficial to me? Thank you
Since he graduated in May, and was under the age of 24 on Dec 31 of the 2021 tax year, he could qualify as your dependent. Understand that if he qualifies as your dependent, then "you the parent" have the choice to claim him, or not claim him. However, the student "does not" have a choice and must select the option for "I can be claimed on someone else's tax return", weather you actually claim him or not.
Here's the rules, gisted from IRS Publication 17:
If the student:
Is under the age of 24 on Dec 31 of the tax year and:
Is enrolled in an undergraduate program at an accredited institution and:
Is enrolled as a full time student for any one academic semester that begins during the tax year, (each institution has their own definition of a full time student) and:
the STUDENT did NOT provide more that 50% of the STUDENT’S support (schollarships/grants received by the student ***do not count*** as the student providing their own support)
Then:
The parents qualify to claim the student as a dependent on the parent's tax return . Period, End of Story. But one thing I want to point out here. The parents *QUALIFY* to claim the student. The parents are *NOT* required to claim the student as a dependent. But even if they don’t, since they *qualify* to claim the student, then if the student will be filing their own tax return the student is *REQUIRED* to select the option for “I can be claimed on someone else’s return”. To reiterate:
If the student qualifies to be claimed on the parent’s tax return, then the student can not take the self-exemption on their own tax return, no …matter…what.
Now, since he graduated in May, it is perfectly feasible that your son "DID" provide more than 50% of his own support for the entire tax year. If so, then you do not qualify to claim him as a dependent on your tax return.
One more thing. Since he was under the age of 24, the student's earnings do not matter. He could have earned a million dollars, and still qualify as your dependent. Remember, the support requirement is on the student, not the parent. There is no requirement for the parent to provide the student any support. Not one single penny.
Thank you so much! I really appreciate it. Have a good day!
(23 in Sept/earned income over $4300)
Because he was a full time student for at least one semester that started in the tax year, his earnings are irrelevant. What matters here, is if he provided "more" than 50% of "his own" support. If he did, then you do not qualify to claim him. My guess would be that he did provide more than half his own support for the entire 2021 tax year. So you wouldn't qualify to claim him.