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If I am a full-time student who does not live at home and pays for my own housing and food expenses, should my parents claim me on their taxes?

Female

Full-time college student

Works 30-40 hours a week in the summer and 10 hours a week in the school year

Pays for housing and food by herself

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14 Replies

If I am a full-time student who does not live at home and pays for my own housing and food expenses, should my parents claim me on their taxes?

How old are you?  Who pays your tuition? Any scholarships or grants?

If I am a full-time student who does not live at home and pays for my own housing and food expenses, should my parents claim me on their taxes?

FAFSA and grants from my college covers most of my tuition, the rest I pay with Federal Student Loans under my name
Carl
Level 15

If I am a full-time student who does not live at home and pays for my own housing and food expenses, should my parents claim me on their taxes?

Loans for which you the student are the primary borrower count as you providing your own support, PROVIDED you (not the parents) are or will be paying those loans. If the student is not the primary borrower on the loan, then that money does not count as the student providing their own support.

If I am a full-time student who does not live at home and pays for my own housing and food expenses, should my parents claim me on their taxes?

My parents do not provide more than 50% of my support
Hal_Al
Level 15

If I am a full-time student who does not live at home and pays for my own housing and food expenses, should my parents claim me on their taxes?

What "does not live at home" mean. If you are away at school, even if living off campus, and your parent's address is still your permanent address, you are still considered living at home.
There's a new urban myth among college students that says they can get a $1000 from the government just for filing a tax form. For most of them, they simply aren't eligible. A student, under age 24, is only eligible for the refundable portion of the American Opportunity Credit if he supports himself by working. You cannot be supporting yourself on parental support, 529 plans or student loans & grants. You must have actually paid tuition, not had it paid by scholarships & grants.  It is usually best if the parent claims that credit.

If I am a full-time student who does not live at home and pays for my own housing and food expenses, should my parents claim me on their taxes?

I do not live at home anymore, I use loans under my name to pay what is left of my tuition payments after financial aid and grants
Carl
Level 15

If I am a full-time student who does not live at home and pays for my own housing and food expenses, should my parents claim me on their taxes?

There is no requirement for your parents to provide more than 50% of your support. In fact, there's no requirement for them to provide one single penny of support. The support requirement is on the student.

If I am a full-time student who does not live at home and pays for my own housing and food expenses, should my parents claim me on their taxes?

Thew rules are different, depending upon your age. That's why we need to know how old you are.
Carl
Level 15

If I am a full-time student who does not live at home and pays for my own housing and food expenses, should my parents claim me on their taxes?

You mean, your age on Dec 31 of 2015, not age right at this moment in time.
Hal_Al
Level 15

If I am a full-time student who does not live at home and pays for my own housing and food expenses, should my parents claim me on their taxes?

The support requirement is on the student IF SHE STILL LIVES AT HOME. She claims she doesn't; although she does not provide any details.
Carl
Level 15

If I am a full-time student who does not live at home and pays for my own housing and food expenses, should my parents claim me on their taxes?

It depends. Below is straight from IRS Pub 970. Please note that the fact that you may work and produce income is irrelevant. Also note that there is no requirement what-so-ever for your parents to provide support - not one penny. The requirement is on you the student. Additionally, scholarships, grants and other sources of income that you do not earn, DO NOT COUNT as you providing your own support.

The support requirement is on the student - not the parents. Basically, that requirement is, "If the STUDENT does NOT provide more than 50% of the student's support (Scholarships/grants 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."

Generally speaking, it is more advantageous for the family overall, for the parent's to claim the student, along with all the education credits the parents qualify for.

          • College Education Expenses

Colleges work in academic years, while the IRS works in calendar years. So the reality is, it takes you 5 calendar years to get that 4 year degree. With that said:

 - Scholarships and grants are claimed/reported as taxable income (initially) in the year they are received. It does not matter what year that scholarship or grant is *for*

- Tuition and other qualified education expenses are reported/claimed in the tax year they are paid. It does not matter what year they pay *for*.

Understand that figuring out who claims the student as a dependent, and determining who claims the education expenses & credits, is two different determinations. It depends on the specific situation as outlined below. After you read it, I have also attached a chart at the bottom. You can click on the chart to enlarge it so you can read it. If it’s still to hard to read on your screen then right-click on the enlarged image and elect to save it to your computer. Then you can double-click the saved image file on your computer to open it, and it will be even easier to read.

Here’s the general rules gisted from IRS Publication 970 at http://www.irs.gov/pub/irs-pdf/p970.pdf Some words are in bold, italicized, or capitalized just for emphasis. This is because correct interpretation by the reader is everything. Take the below contents LITERALLY, and do not try to “read between the lines”. If you do, you’ll interpret it incorrectly and risk reporting things wrong on your taxes. For example, there is a vast difference between “can be claimed” and “must be claimed”.  The first one indicates a choice. The second one provides no choice.

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 one academic semester that begins during the tax year, (each institution has their own definition of a half 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 will claim the student as a dependent on the parent's tax return and:

The parents will claim all schollarships, grants, tuition payments, and the student's 1098-T on the parent's tax return and:

The parents will claim all educational tax credits that qualify.

If the student will be filing a tax return and:

The parents qualify to claim the student as a dependent, then:

The student must select the option for "I can be claimed on someone else's return", on the student's tax return. The student must select this option ieven f the parent's qualify to claim the student as a dependent, and the parents do not claim them.

Now here’s some additional information that may or may not affect who files the 1098-T. If the amount of scholarships/grants exceeds the amount of qualified education expenses, the parent will know this when reporting the education on their tax return, because the parent will not qualify for any of the tax credits. (They only qualify for tax credits based on out-of-pocket qualified expenses not covered by scholarships/grants.)  Also, the parent’s will not qualify for the credits depending on their MAGI which is different for each credit, and depends on the marital status of the parent or parents.

In the case where scholarships/grants covers “all” qualified education expenses, the parent’s don’t need to report educational information on their dependent student at all – but they still claim the student as a dependent if they “qualify” to claim the student.

 If the scholarships/grants exceed the qualified education expenses, then the student will report the 1098-T and all other educational expenses and scholarships/grants on the student’s tax return. The student will pay taxes on the amount of scholarships/grants that are not used for qualified education expenses. However, if the student’s earned income reported on a W-2, when added to the excess scholarships/grants does NOT exceed $6200, then the student doesn’t even need to file a tax return, and nothing has to be reported.

If the student has any other taxable income not reported on a W-2, and it exceeds $400, (not including taxable portion of scholarships/grants) then most likely it’s considered self-employment income. That will require a tax return to be filed and the student will have to pay the Self-Employment tax on that income.

Finally, regardless of the student’s W-2 earnings, if any taxes were withheld on those earnings and it was less than $6200, then the student should file a tax return so as to get those withheld taxes refunded.


Hal_Al
Level 15

If I am a full-time student who does not live at home and pays for my own housing and food expenses, should my parents claim me on their taxes?

From what you describe, your parents cannot claim you on their taxes; because:

-You do not live with them, not even in the summer or school vacations

-You make more than $4000 per year in income and/or they do not provide more than half your support

 Even if you claim yourself, you are not eligible for the refundable portion of the American Opportunity Credit, because most of your support comes from FAFSA & loans

______________________________________________________________________________________________

There are two types of dependents, "Qualifying Children"(QC) and standard ("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. 

A child of a taxpayer can still be a “Qualifying Child” (QC) dependent, regardless of his/her income, if:

1. He is under age 19, or under 24 if a full time student for at least 5 months of the year, or is totally & permanently disabled

2. He did not provide more than 1/2 his own support. Scholarships are considered third party support and not as support provided by the student.

3. He lived with the parent (including temporary absences such as away at school) for more than half the year

A person can still be an other dependent (Qualifying relative), if not a Qualifying Child, if he meets the 6 tests for claiming a dependent:

1. Closely Related OR live with you ALL year

2. His/her gross taxable income for the year must be less than $4,000 (2015)

3. You must have provided more than 1/2 his support

In either case:

4. He must be a US citizen or resident of the US, Canada or Mexico

5. He must not file a joint return with his spouse or be claiming a dependent of his own

6. He must not be the qualifying child of another taxpayer

Carl
Level 15

If I am a full-time student who does not live at home and pays for my own housing and food expenses, should my parents claim me on their taxes?

Just a reminder, the income requirement only applies if the student is over the age of 23 on Dec 31 of the tax year.

If I am a full-time student who does not live at home and pays for my own housing and food expenses, should my parents claim me on their taxes?

The income requirement also applies for any age if the child does not live at (the parents) home more than half the year or is temporarily absent from home for one of the valid absences such as to attend school.   If the child has permanently left home and will not return to live there, then it is not temporary.
**Disclaimer: This post is for discussion purposes only and is NOT tax advice. The author takes no responsibility for the accuracy of any information in this post.**
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