Dependent College Internship

[BudgetNuts]

Hello, I have a few questions about how to report on my 2019 tax return. Here are my questions:

1) Child is still in college but did a 6 month college paid internship last year out of state earned about 9,000. 

2) Do internships qualify as living with you full time on tax return?

3) Child is under the age of 24 can I still claim as dependent on a joint return?

4) Does child also have to file their own federal return?

5) Does child have to file a state tax return in resident state?

6) Does child have to file a state tax return in internship state if that state does not have state taxes (FL)?

7) Child has a 529 plan and withdrawals were made to college and some to student directly how does this get reported?

Sorry for the many questions just trying to figure it out this year since student earned income......thanks

[DianeC958]

2) Yes, since the internship is related to college it is still considered that the college student lived with you for the whole year.

3) Yes, you can still claim the child on your Joint Return since the college student is less than 24 years old and a full time student for at least 5 months of the year.

4) Possibly,  if the college student received a W-2 for the paid internship and the amount was around $9,000 there would have no taxable income and not be required to file a return.  If there was Federal Tax withheld then you may want to file a return to receive that amount as a refund.

If the paid internship was reported on a 1099-Misc then yes the college student needs to file and is subject to Self-Employment Tax on the income.

5) Possibly,  if the college student earned income in the state where you live then a state return may need to be filed.  If the college student did not earn income in the state where you live then no return is usually required to be filed. The income from the internship would require a state tax return for the state where the internship took place if the state taxes income.

6) Yes, if the internship was in Florida then a state return is not required since Florida does not tax personal income.

7)  Withdrawals from a 529 plan would be reported on your return if you are claiming the college student on your return.

[BudgetNuts59]

The Internship issued a W-2 and taxes were withheld. Does dependent file his taxes but indicate he is a dependent on someone else's return? Also, if he is a resident of IL but did his internship in FL and no FL taxes or IL taxes were taken out does he still have to file in IL? Florida has no income tax so I assume no filing is needed for FL. 

Also, does he file 1099-G and 1098-T if both are in his name? He made less than 9,000 and taxes were taken out. Thanks

[KrisD15]

Yes, the student would file a Federal Return to get the federal taxes withheld back as a refund and select "Someone else can/will claim me" since he is a dependent on your return. 

The student would be considered a resident of Illinois (since he is your dependent) and MAY need to file an Illinois return, depending on his income and exemption allowance. If he does not owe Illinois tax, and is only filing a federal return to get his tax refunded, he would not need to file a state tax return. 

A 1099-G could report several different things:

If it is for a state refund and the student did not itemize on his 2018 Federal return (which he wouldn't have if he was a dependent) the state refund is not taxable and is not reported on his 2019 tax return(s). 

If it is for unemployment or other income, it most likely does need to be reported on his return. 

The 1098-T is entered in your Turbotax program and used on your return if it allows you to get an education credit. If it causes taxable income to be reported, the taxable income is reported on the student's return and your TurboTax program would tell you how much the student needs to report and how to enter it into his TurboTax program.  

[BudgetNuts59]

Thank you....sorry I mean't to type 1099-Q Payment from Qualified EducationPrograms....who files that if I am claiming his as dependent but the 1098-T and 1099-Q are in his name? Does it go on my return or his? 

[DavidS127]

If you are claiming the child as a dependent, the Forms 1098-T and 1099-Q go on your tax return.  For the 1099-Q, the student is the beneficiary, even if you are listed at the recipient.