Did you support yourself in 2019? Need help answering this question.

[DawnC]

We asked you this question because based on your age, you might qualify for an education tax break called the American Opportunity credit.

Think about the people who helped pay for your living expenses. Did anyone pay for your rent or food? Consider all your living expenses and what you contributed. If you paid for more than half with your earned income, you supported yourself.

If a parent or someone else paid for more than half of your living expenses, you did not support yourself. If you used unearned income or student loans to pay for most of your expenses, you did not support yourself.

If you're in the military, your housing allowance counts as your income. If you paid for most of your living expenses with your income and housing allowance, you supported yourself.

[marceaufam4]

I graduated college in May 2019 and my parents supported me though I paid for some things. Since June 2019 I have fully supported myself. How do I answer this question?

[DMarkM1]

See DawnC0 response above.  Did you provide more than 1/2 of your support for the entire calendar year 2019?  Your support would be your cost for lodging, food, clothes, entertainment, medical, household bills (heat, cool, electric, etc).  Remember scholarships/grants do not count as your contribution.   Here is a link with detailed discussion on the issue.   

[Hal_Al]

@maurkilahinton Why do you think you need an  answer to that question? That is, what are you trying to accomplish?  The answer to the question is quite nuanced.  In fact there are two separate questions: 1. did you provide more than half your own support and 2. did more than half your support come from your earned income (wages).

Your parent(s) cannot claim you as a dependent, if the answer to #1 is yes.  You cannot claim the refundable education credit if the answer to #2 is no.  The first question is usually academic.  With the tax law change, effective 2018, most students will get the same refund whether they claim themselves or not. The personal exemption has been eliminated and the standard deduction increased.

 The statement, at the other reply, "If you used unearned income or student loans to pay for most of your expenses, you did not support yourself" is incorrect.  Unearned income (interest, dividends, capital gains), in your name is considered as support you provided;  as are student loans, solely  in your name (your parents did not co-sign).  Scholarships, on the other hand, are considered third party support and not support provided by you..

The IRS has a worksheet that can be used to help with the support calculation. See: http://apps.irs.gov/app/vita/content/globalmedia/teacher/worksheet_for_determining_support_4012.pdf The support value of the home, your parents provide,  is the fair market rental value plus utilities, divided by the number of occupants.

[Hal_Al]

@marceaufam4  See this standard reply, addressed to a parent asking the same question. 

Graduation year

If he/she was a student (under 24) for at least 5 months and lived with you for more than half the year, and did not provide more than 1/2 his own support for the whole year, you can still claim him. Be sure he knows you're claiming him, so he doesn't claim himself. He can only be claimed once. But, he can "file taxes" without claiming his own exemption.

The real question is who should be claiming him in this "transition" year to adulthood. You two have to agree on who is going to claim his exemption. Each should do their taxes both ways and see which way the family comes out best.  Even then, you have to meet the rules. The rule is that a child of a taxpayer can still be a “Qualifying Child” dependent, regardless of  his income, if:

1. he is a full time student under 24 for at least 5 calendar months of the year (graduating in May usually means you meet the 5 month rule)
2. he did not provide more than 1/2 his own support (scholarships are considered 3rd party support and not support provided by the student). 
3. lived with the parent (including time away at school) for more than half the year

So, it usually hinges on  "Did he provide more than 1/2 his own support in 2019.

The support value of the home you provided is the fair market rental value of the home plus utilities & other expenses divided by the number of occupants. IRS Publication 501 on page 20 has a worksheet that can be used to help with the support calculation. See: http://www.irs.gov/pub/irs-pdf/p501.pdf