Should I include a dependent with income on my return?

[kerkar]

We are in a high tax bracket. Our son graduated college, and got a well paying job. But he works from our home, and we pay all his bills. Should we continue to include him as a dependent, or let him file his own? If we claim him as a dependent, do we have to include his income, or can he still file separately for his income?

[xmasbaby0]

Do you mean your son graduated from college in 2022?   The year of graduation is tricky.   How old was he at the end of 2022?   Did he earn over $4400 in 2022?   Provide a few more details about your son.

[Bsch4477]

Since he is not a student and earns more than $4,400 you can’t claim him as a dependent even though you provide more than half of his support. He files his own return. 

[NCperson]

@kerkar - under NO circumstance should his income get reported on your tax return.  He has his own social security number and on your tax return only you and your spouse are 'tax payers'. 

in the year of graduation, whether he can be a dependent is tricky.....I agree with @xmasbaby0 

best to use the IRS app to be sure: 

https://www.irs.gov/help/ita/whom-may-i-claim-as-a-dependent

if the child was in school for 5 months of 2022 (i.e. a "full time student" by definition" even if graduated in May), ...it comes down to whether or not the student provided more  than 50% of his own support.

if no, then a dependent

if yes, then not a dependent

$4400 income limit doesn't matter. 

Once not a full-time student, if he earns at least $4400 , he can't be a dependent. 

[kerkar]

Thanks. He graduated college in 2021, and has worked in 2022. A CPA friend had told me that we can claim him on our tax return, and he can file his own with zero exemptions (if it is the right word) - that seemed confusing to me in the sense would that reduce overall tax liability (we pay less in higher tax bracket, he pays more in lower tax bracket)? But it looks like that is not even an option since he earns way more than $4,400 per month.

[VolvoGirl · Accepted solution]

If he was not a student in 2022 you can not claim him.  And if he made over $4,400 for the whole year, not just per month.  He will have to file his own return and he claims himself.  Double check with your CPA friend, that seems wrong.  

[NCperson]

@kerkar - if you child was not in school during 2022 and earned more than $4400, you can not claim him.  it is that simple

you can verify that using the official IRS dependent tool .

https://www.irs.gov/help/ita/whom-may-i-claim-as-a-dependent

the use of the word "exemptions" ceased when the tax laws changed in 2018. (It may come back in 2026, so I wouldn't rip it out of your dictionary just yet!)