College Student Dependent Filing

[moyers0913]

Greetings,

I'd like to share my family financial situation for 2019 before asking two filing questions concerning my son's status:

** My son was born on Aug 3, 2000 and is currently a college student at Penn State

** He lived on the college campus for the 1st 5 months of 2019 and then spent the remaining 7 months living at home with my wife and I while he continued to take online courses at Penn State

** Nathan did not earn any job-related income but did receive FAFSA Financial Aid in 2019

My questions:

1.) As his parent, can I claim my son as a dependent on my federal tax return for tax year 2019 ?

2.) Does my son need to file his own federal tax return for tax year 2019?

Thank you very much,

Scott Moyer

[DoninGA · Accepted solution]

Since he was a full time student under the age of 24 and lived in your home for over one-half the year you should be able to claim him as a dependent under the Qualifying Child rules.  As your dependent you can also claim any education expenses and education credits on your tax return.  The dependent cannot claim those credits on their tax return.  If he did not have any type of income in 2019 there is no need for him to file a tax return (financial aid is not reportable income)

To be a Qualifying Child -

1. The child must be your son, daughter, stepchild, foster child, brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant of any of them.
2. The child must be (a) under age 19 at the end of the year, (b) under age 24 at the end of the year and a full-time student or (c) any age and permanently and totally disabled.
3. The child must have lived with you for more than half of the year. Temporary absences while away at college are considered living with you.
4. The child must not have provided more than half of his or her own support for the year.
5. If the child meets the rules to be a qualifying child of more than one person, you must be the person entitled to claim the child as a qualifying child.
6. The child must be a U.S. citizen or U.S., Canada or Mexico resident for some portion of the year.
7. The child must be younger than you unless disabled.

[moyers0913]

Thank you very much for the helpful information.

[moyers0913]

I have a 2nd question related to the information already posted.  We're wondering why we could not claim our son's educational expenses for 2019 like we did for 2018, especially since our family income was not much different.

We just received my son's 1098-T from the University.  For "Payments received for qualified tuition and related expenses" it shows $19,190.00 and for "Scholarships or grants" it shows $5445.00

In Turbo Tax, it asked for the Tuition/Grant amount, but not the expenses for 2019 like it did for 2018.  At the end of the assessment TT stated "It turns out Nathan's Scholarship or Grant Counts as Income" and "There is no taxable income in your return."

Other Facts

1. Our return is Married Filing Jointly

2. 2019 was our son's 2nd year of full time University enrollment

Thank you again for any assistance,

Scott Moyer

[JamesG1 · Accepted solution]

If I understand your situation correctly, there is only one 1098-T.  Box 1 reads $19,190.  Box 5 reads $5,445.  I presume that Box 8 is also checked?  If the above is correct, I wonder whether you told TurboTax that the scholarships paid one or more of these items?

If you use your scholarship to pay for any of these, it counts as income and the amount paid is taxable:

• Room and board
• Travel and incidental expenses
• Any fees, books, and supplies or equipment that aren't required for your courses

Use these steps.

• Click on Deductions & Credits.
• Click 'edit' next to Expenses and Scholarships.
• Under Your Education Expenses Summary, click 'edit'.
• Under 'Scholarships / Grants, click 'edit'.
• Did Nathan Receive a Scholarship or Grant in 2019?, click 'continue'.
• Did Nathan's Aid Include Amounts Not Awarded for 2019 Expenses?, click 'continue'
• Under Did Nathan Pay for Room and Board with a Scholarship or Grant?, click 'No'.  Click 'continue'.

You should be able to confirm from the University's bursar or billing statement whether the scholarships in question did, in fact, pay only the room and board.  I suspect that the statement will show that it did not.

[proud_leo_wife]

So if I put my daughter's info from her 1098-T on our taxes, I should check "no" on her tax form when it asks if she received a 1098-T? 

[ColeenD3]

Did you mark under the Personal Info section that she was being claimed as a dependent? It's possible that question won't arise if you do.

You can answer "no" to that question.

[svarma12]

If my college student son did have income in the year of filing, and I paid for college using 529b, how should we file?

He did live half the year with us and half at school.

I assumed that I should claim him as dependent, and he should also file due to his income (and to be able to capture covid relief that he is eligible for)

Thank you

[ErnieS0]

You can claim your son as your dependent if he was under 24 and a full-time student and if you provided for more than half his support.

Depending on how much income he had and what type, he may have to file an income tax return. If he is not required to file, he may want to file to claim a refund. He will not claim himself on his tax return.

Dependents are not eligible for stimulus payments. Any missing first and second stimulus payments will be added to your return as Recovery Rebate Credit. You will also get the third stimulus.

See Qualifying Child Rules.

[svarma12]

Thank you!

Follow up question - when I opened the 529b, my son had just been born so I indicated myself as the recipient. I am reflecting 1099-Q in turbo tax and when I answer the questions (who was the recipient etc) I still end up with an error at the end where the program wants to make me indicate that I was a student even though I indicate in the workflow that the distribution was spent on my son's educational expenses.

How do I get this to work? your help appreciated.

Srikant

[CatinaT1]

You are the beneficiary, your son is the recipient.