claiming college going daughter as dependent when "married filing seperately"

[jaym2]

My Filing Status has been "Married Filing Seperately" for the past few years. My spouse has been claiming my Daughter as a dependent the prior years as She lived with her. However in the year 2021, Daughter turned 18 and moved out and started going to college. I have paid the entirety of her college fees as well as a majority of her living expenses incurred when She was living at home with my spouse prior to going to college in Fall 2021.
I have 2 questions:
1. Can I claim my Daughter as a dependent ?
2. can I get a tax deduction for the college expenses (tuition and board) I paid for her in 2021 ?

Thank You!

Thanks for taking the time to answer my questions. 

[xmasbaby0]

When you file married filing separately you are not eligible for education credits.  If you claim a qualified dependent over the age of 16 you can get the $500 credit for other dependents.   And if you file MFS you are not eligible for the earned income credit.

[xmasbaby0]

IRS interview to help determine who can be claimed:

https://www.irs.gov/help/ita/who-can-i-claim-as-a-dependent

https://ttlc.intuit.com/questions/3113432-who-can-i-claim-as-my-dependent  

https://ttlc.intuit.com/questions/3383321-why-didn-t-i-get-a-credit-or-deduction-for-education-expen...

[jaym2]

Thank You for your earlier response. I completed the IRS interview that concluded that I can claim my Daughter as a Dependent. I understand that I cannot claim the "college education expenses" credit when my status is "Married Filing Seperately". But can I change my status to "head of household" and claim her as my dependent  in order to get the credit for college education expenses?

[CatinaT1]

Possibly.  

You can qualify for Head of Household if you: 

1. Were unmarried as of December 31 this year and 
2. Paid more than half the cost to run your home for the year(rent, mortgage, utilities, etc.) and 
3. You supported a qualifying person. 

If you are legally married as of December 31 and a child lives with you, you can qualify for Head of Household under a slightly different set of rules. Read more 

After you answer all the questions about yourself and your dependents at the beginning of your return, we'll let you know if your situation qualifies for Head of Household. 

You can also revisit these questions by selecting My Info (online) or Personal Info (software), then selecting Edit next to your name or your dependent's. 

[jaym2]

Thank You @CatinaT1 and @xmasbaby0  for your prompt answers and helpful links. Will explore further as I do my taxes. 

[Opus 17]

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@jaym2 wrote:

Thank You for your earlier response. I completed the IRS interview that concluded that I can claim my Daughter as a Dependent. I understand that I cannot claim the "college education expenses" credit when my status is "Married Filing Seperately". But can I change my status to "head of household" and claim her as my dependent  in order to get the credit for college education expenses?

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Doubtful that is the correct answer.

There are two types of dependent, qualifying child and qualifying relative.  A qualifying child dependent must live in your home more than half the nights of the year.  College is usually considered a temporary absence, and a child is usually considered to live "at home" even when they are away at college.  But where is the child's regular or permanent home?  Probably with the mother, from what you describe.

For a qualifying relative dependent, the person doesn't have to live with you as long as you provide more than half their support, but there is another condition; a qualifying relative dependent can't be a qualifying child dependent of someone else.  If your daughter is a qualifying child dependent of the mother, you can't claim her as a qualifying relative dependent.  

Even if the child is a qualifying relative dependent of yours, they do not qualify you to file as HOH unless they lived in your home more than half the year.

Unfortunately, you are doing the right thing by supporting your child, but there are no financial rewards in the tax code for you. 

[jaym2]

@Opus 17  Thank You for your response.  My Daughter did change her permanent address to mine(different state from my spouse)  when She started going to college in the State that I live in currently.  I plan to ask my Spouse to allow me to claim her a qualifying dependent. I understand if She claims her as a dependent,  then I cannot claim her as a dependent. Is my thinking correct ?

[Opus 17]

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@jaym2 wrote:

@Opus 17  Thank You for your response.  My Daughter did change her permanent address to mine(different state from my spouse)  when She started going to college in the State that I live in currently.  I plan to ask my Spouse to allow me to claim her a qualifying dependent. I understand if She claims her as a dependent,  then I cannot claim her as a dependent. Is my thinking correct ?

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Timing matters.  If your daughter has lived in your home (except for temporary absences) more than half the days of 2022, and if she meets the other tests (does not provide more than half her own support, is a full time student), then she meets the tests to be your qualifying child dependent and also meets the test to be a qualifying person for HOH status.  You don't need to ask the other parent's permission if you are the parent who had "physical custody" more than half the days of the year.  

If your wife also claims your daughter as a dependent, whoever files second will be locked out of e-filing and will have to file by mail.  The IRS will eventually investigate the duplicate dependent claim, which will mean determining where the child "lives".   So although you can claim your daughter without permission, there are advantages to discussing it with your spouse first.  

If you and your spouse can't agree and you file a duplicate dependent claim, the IRS would look to the circumstances surrounding your child's change of address.  Maybe she changed her address in name only, such as to get in-state tuition, but her domicile is still her mother's house.  

A domicile is a person's true permanent home.  There is no single factor that proves domicile, but some of the factors include where the person lives most of the time, where they are registered to vote, car registration, drivers license, doctor, dentist, church, and other significant social and financial ties.  To change domiciles, it is necessary to both establish a new domicile, and abandon the prior domicile, with the intent that the new domicile is permanent or at least indefinite (long term with no planned end date).   It's possible to live away from one's domicile for a long time without actually changing it.

(Domicile also determines where she files a state income tax return for any job income, by  the way.)

If your child is still domiciled with the mother, then she is temporarily at school even when she briefly stays with you, and she would be deemed to live with the other parent for tax purposes.  She could certainly have changed domiciles and not just in name only (such as for tuition), you will have to look at the overall facts and circumstances.

[jaym2]

Thank You for your detailed reply @Opus 17  . My Daughter has indeed changed her Domicile. Has New Drivers License, Completed Voters registration etc. However She did not live more than half the year with me in 2022. So it appears (from your response) I cannot claim her as a qualified dependent . Will explore if I can claim her as a qualified relative instead as long as my spouse does not claim her as a qualified dependent. 

[DaveF1006]

Please read this IRS link provided for more information on whether or not your child qualifies as a qualifying relative. This is a long document but you can scroll to the bottom of the page to the table of contents and click on the link where it references qualifying relatives then this will take you to the section. 

[Opus 17]

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@jaym2 wrote:

Thank You for your detailed reply @Opus 17  . My Daughter has indeed changed her Domicile. Has New Drivers License, Completed Voters registration etc. However She did not live more than half the year with me in 2022. So it appears (from your response) I cannot claim her as a qualified dependent . Will explore if I can claim her as a qualified relative instead as long as my spouse does not claim her as a qualified dependent. 

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Remember that a child living away at college is still considered to "live with" the parent where she is domiciled. for purposes of claiming a dependent.  The child is temporarily away but still "lives with" the parent they would have lived with according to their domicile.  So it depends whether she changed her domicile before or after June 30, 2022.