Dependent as a full time student drastically changes my refund for the worse

[steveb1972]

I have an interesting situation as a divorcee of 12 years. I have a 19-year-old son, a full-time student who lives in an apartment.  I pay his rent, and he is on a full scholarship.   As part of the divorce decree, we switch off who is head of household and who can claim him as a dependent.  2024 is my year to be head of the household.  I answered the dependent questions, stating he didn't live with me (apartment with me paying the rent), being claimed on my ex's return, he didn't make more than 5k, and I paid more than half his living expenses.  Since he didn't live with me, my filing status was set to single instead of HoH by TurboTax Premium web version.  At this point, I have a $21 refund before I get to "less common situations" for my dependent.  If I check the box for "was a full-time student" in 2024, I go from getting a refund to owing $479 to Federal.  If I leave it at NONE of these apply, it stays at $21 refund.  Why is this happening?  I seem to be getting punished for paying for my son to live in an apartment while he is a full-time student.  

[MonikaK1]

Your child has to live with you in order for you to claim him as a dependent and qualify for head of household filing status. However, If your child lives outside of the home because they are away at school or due to another temporary absence, you can still claim them as a dependent as long as they meet all of the other requirements of being your dependent.  

See this TurboTax tips article and IRS Publication 501 for more information about qualifying dependents.

[steveb1972]

Thanks.  Why does it change my taxes so much if I say my dependent is a full-time student, though?  If I check that he was a full-time student, it changes me from a modest refund to owing $479.  I would have expected to be getting a little more back, not owing a ton more. 

[DoninGA]

@steveb1972 Something is not right.  If you do not claim him as a dependent then you would be filing as Single, where the Standard Deduction is $14,600 AND you would not be receiving the $500 Other Dependent credit.

If you do claim him as a dependent, by selecting that he lived in your home for the Whole Year (Temporary absences while away at college are considered living with you.)  And you provided over one-half the cost to maintain your home, you would be eligible for Head of Household filing status, where the Standard Deduction is $21,900 and you would receive the $500 Other Dependent credit.

Delete him as your dependent and re-enter.  Carefully answer all the questions presented when entering the dependent.

[steveb1972]

Thanks for the replies.  

@DoninGA So, here is what I did.  I deleted him and added him back in.  I said he lived with me for 7 months to get HoH because I felt it qualified since he is a full-time student living in an apartment that I pay for near the college. Otherwise, he would have been at home with me.  I said I had a written agreement and that he was being claimed on her tax return as a dependent, and he had not made more than $5050.  I feel like it is ok to do it that way since the IRS site (and you) says explicitly that absences for education count as living with you. Taxes are so weird, but this is the last year I will have the whole dependent/HoH swap with my ex since he will graduate in May.  It was a significant bump in my refund, more than I expected. I haven't finished filing yet.