Child in college

[londonbeck]

My college daughter has a part-time job where she makes around $10,000. She does not pay for over half of her college living expenses, etc. Should I be claiming her on my tax return as a dependent? OrShould she file herself single and I do not claim her?

Thanks

[Corrlich44]

Dear Londonbeck,

Thank you for posting your question in the forum today!

While it is not known whether you will be filing a 2020 or 2021 tax return as Single or Head of Household, which is the starting point of your decision-making because of a potential additional Standard Deduction of $6250 between the Single Deduction of $12550 versus the Head of Household Deduction of $18800, this alone will save you federal and possible state income tax dollars, before you even consider claiming your daughter as a dependent.

Because your daughter is most likely over the age of 18, additional maximum tax credit you would be eligible to claim is $500 through the Other Dependent Credit.

And as you stated, because your daughter's income is not providing more than 50% of her support that you most likely are providing, it will only be beneficial to you to claim her.

But, the other factor you have to seriously consider is the American Rescue Plan Recovery Rebates being provided for 2021.

Again, because your child is most likely over the age of 18, you would not be eligible to claim that portion of the rebate on her behalf if you claim her as a dependent, but she would when she files her own personal tax return and receive the Recovery Rebate Credit up to $1400.