For all of you in this thread, here's what the law say on dependent status and ***ONLY*** dependent status.
If on Dec 31 of the tax year you were under the age of 19
***********OR***********
If on Dec 31 of the tax year you were under the age of 24 and;
enrolled as a full time student for *ANY* *ONE* *SEMESTER* that started in the tax year and;
was enrolled in an accredited institution, and;
was enrolled in a course of study that will lead to a degree or credentialed certification, and;
You did not provide more than half of your own support for the *ENTIRE* tax year (all 365 days of it), then;
You qualify to be claimed as a dependent on your parent's tax return. Period. End of Story.
Now the key word here is *QUALIFY*. It flat out *does* *not* *matter* if your parents actually claimed you or not. If you just *QUALIFY* to be claimed as a dependent, then you have *NO* *LEGAL* *CHOICE* but to select the option for "I can be claimed on someone elses tax return". Again, it *does* *not* *matter* if they actually claim you as a dependent or not.
Now some special notes about the above, and what you *DO* *NOT* see in those requirements.
- There is no mention of the student's income. If the student meets all of the requirements above to be claimed as a dependent, the student could have earned a million dollars (literally!) in the tax year and it doesn't matter. They still qualify to be claimed as a dependent on the parents tax return.
- There are only two possible ways the student can provide more than half of their own support for the entire year. First understand that "ALL" third party income (scholarships, grants, 529 distributions, gifts from Aunt Mary, money from parents, etc.) ***DO*** ***NOT*** ***COUNT*** for the student providing their own support. Again, there are only two possible ways the student can have any claim to providing more than half of their own support.
1) The student was self-employed or had a W-2 job and earned a sufficient amount of money to support a claim to having provided more than half of their own support. The earned amount must also exceed the total amount of all third party income (scholarships, grants, etc.) received for the tax year.
2) The student is the *PRIMARY* borrower on a *qualified* student loans, and a sufficient amount of that borrowed money was distributed to the student during the tax year to support a claim to having provided more than half of their own support. The amoutn distributed must also exceed the total of all third party income received by the student or on behalf of the student during the same tax year.
Now not all support is based on money received. There are those things that are considered support that do not involve the direct transfer or handling of money. But they do have a monetary value. Support consist of the cost of or the fair market value of:
- Tuition, Books and Lab fees
- Housing (rent and utilities)
- Food
- Transportation
- Clothing
- Entertainment
Not only do you have to prove what is claimed for the cost of any of the above if ever audited on it, but those costs must be reasonable too - or it raises flags big time with the IRS. For example, renting a $5000/mo penthouse suite for an undergraduate college student isn't going to cut it with the IRS. I don't care if your name is Michael Jordan. (My own son attended college with his son.) One cannot possibly justify a "need" for that expensive a home for "any" undergradate, I don't care who they are.
In conclusion, if you are under the age of 19 at the end of the tax year, your earnings do not matter.
However, if you are over the age of 18 and under the age of 24 and "WERE" "NOT" a full time student in the tax year, then if you earned more than $4,150 of ***EARNED*** income during the tax year, absolutely nobody on this planet can claim you as a dependent on their tax return. No exceptions.
