Can I file married jointly if my spouse is being claimed as a dependent by his parents?

[sydneyannstaxes]

My husband in a medical student who makes no income, he only gets get federal student loans. his parents help us out because they want to help him through school. They typically claim his as a dependent. When I file, should I file jointly or separately, and why?

[Bsch4477]

If you file jointly, assuming you are not filing only to get back tax withheld, his parents can’t claim him. You would have to file as married separately which is a disadvantaged filing status. You all would have to compare the parent’s savings with what you would save filing jointly to see what is better. Given that the child tax credit would only be $500 for them, you might save more filing jointly. 

Note that to claim him they would have to be able to show that they provided more than half of his support. 

[MinhT1]

His parents can only claim him as a dependent if your joint return is only to get back all the estimated or withheld taxes. If either of you have a tax liability, you have to file separately.

Alternatively, if his parents don't claim him, then you can file jointly, which will be more tax beneficial for you and your husband. 

You should compare the two scenarios and find the one which give the best tax outcome for the family. 

If his parents claim him, they get the Other Dependent credit of $500 and any education credits unless they are limited by income. 

If they don't claim him and you file jointly, you'll have a tax savings due to the higher standard deduction and the eventual education credits that you can claim.

@sydneyannstaxes

[Edited 03/13/2024 | 8:23AM PST]