In calculating total support for a dependent, do I have to include state and federal grant to determine whether I provided more than half of their support?

[Question4]

I recently learned that I may be eligible to claim my partner as a dependent on my tax return this year. Do I need to account for the federal/state grants he received to pay for tuition in calculating his total support? These would be the amounts listed in Box 5 on his 1098-T. 

Also, does it matter that he is older than myself in claiming him as my dependent? 

*Given that he was over the age of 24 and thus not eligible to be a qualifying child although he was a full time student in 2017

Thanks in advance! 

[MichaelDC · Accepted solution]

No. It doesn't matter that he is older than you. At best, he might be considered as your Qualifying Relative (if he lived with you for the entire year).

So, it gets down to the support issue, i.e. a taxpayer must have provided more than half the support of a qualifying relative (QR) (section 152(d)(1)(C)).

Section 152(f)(5) prescribes a special treatment for scholarships with regard to the support tests. If the recipient is a full-time student at a qualifying educational organization as defined in section 170(b)(1)(A)(ii) and “a child of the taxpayer” (section 152(f)(5)(A)), any scholarship is excluded from the support tests. For this purpose, a child of the taxpayer is defined as a son, daughter, stepson, stepdaughter, eligible foster child, a legally adopted child or an individual placed with the taxpayer for adoption (section 152(f)(1)). Descendants of these individuals are not included, even though they are in the relationship tests for QCs and QRs.

So, you will have to count his grants as part of his support. You'll need to see what other support you provide him in order to claim his dependency. As a help, attached is the official IRS worksheet for determining support.

If you have any other details regarding this question, please feel free to post them in the comment section. 

[Question4]

Thanks would that be the entire amount listed in Box 5 or just the difference after taking qualified education expense out?

For example, if he received $10,000 in grants and his tuition cost $7,000, am I looking at the entire $10,000 or just the $3,000 in determining his total support?

He was a full time student (unemployed) and lived with me the entire year.  I paid for our rent, bills, shopping expenses but he contributed where he could with the funds left over from grant after paying tuition.  His tuition was fully paid for with state/federal grants and exemptions.  None were paid with loans (no loans).

[MichaelDC]

If he received $10,000 in grants, that's $10,000 that's used toward support, whether it's tuition, books or groceries. Keep looking for ways that you help him financially. Hope this helps.