Can I claim a college student as a dependent if he is away all year?

[jbb]

I pay my 22 year old college student's tuition and most living expenses. The directions say "count the number of months away at college as living with you".  He lives in an apartment away at college year round but does not take summer courses. Can I claim him as a dependent?

[Carl]

Yes. There are no exceptions to the "count days away at college as living with you".
College Education Expenses
Understand that figuring out who claims the student as a dependent, and determining who claims the education expenses & credits, is two different determinations. It depends on the specific situation as outlined below.
Here’s the general rules gisted from IRS Publication 970 at http://www.irs.gov/pub/irs-pdf/p970.pdf
If the student:
Is under the age of 24 on Dec 31 of the tax year and:
Is enrolled in an undergraduate program at an accredited institution and:
Is enrolled as at least a half time student for one academic semester that begins during the tax year, (each institution has their own definition of a half time student) and:
the student provided LESS than 50% of their OWN support support (schollarships/grants received by the student do not count as the student providing their own support)
Then:
The parents will claim the student as a dependent on the parent's tax return and:
The parents will claim all schollarships, grants, tuition payments, and the student's 1098-T on the parent's tax return and:
The parents will claim all educational tax credits that qualify.
If the student will be filing a tax return and:
The parents qualify to claim the student as a dependent, then:
The student must select the option for "I can be claimed on someone else's return", on the student's tax return. The student must select this option ieven f the parent's qualify to claim the student as a dependent, and the parents do not claim them.
Now here’s some additional information that may or may not affect who files the 1098-T. If the amount of scholarships/grants exceeds the amount of qualified education expenses, the parent will know this when reporting the education on their tax return, because the parent will not qualify for any of the tax credits. (They only qualify for tax credits based on out-of-pocket qualified expenses not covered by scholarships/grants.)  Also, the parent’s will not qualify for the credits depending on their MAGI which is different for each credit, and depends on the marital status of the parent or parents.
In the case where scholarships/grants covers “all” qualified education expenses, the parent’s don’t need to report educational information on their dependent student at all – but they still claim the student as a dependent if they “qualify” to claim the student.
 If the scholarships/grants exceed the qualified education expenses, then the student will report the 1098-T and all other educational expenses and scholarships/grants on the student’s tax return. The student will pay taxes on the amount of scholarships/grants that are not used for qualified education expenses.However, if the student’s earned income, when added to the excess scholarships/grants does NOT exceed $6100, then the student doesn’t even need to file a tax return, and nothing has to be reported.

[brookstlb]

My daughter was full time for the spring semester of 2014, lived in an apartment that I rented and I provided over 50% of her support through August 2014.  However she took academic hiatus for the fall 2014 semester.  Does your reply cover this situation as well.  She was 20 at the time.

[Carl]

Note that the rules do NOT say that the parent provides more than 50% of the support. There is no such requirement. The rules state that if the STUDENT provided LESS than 50% of the STUDENT'S OWN support, then the parents qualify to claim them. Hopefully, that helps clarify it for your specific situation.

[brookstlb]

Thank you.

[amanda_not_miran]

where did you find this information in the IRS Publication 970 (<a rel="nofollow" target="_blank" href="http://www.irs.gov/pub/irs-pdf/p970.pdf">http://www.irs.gov/pub/irs-pdf/p970.pdf</a>)?

[Carl]

What specific information are you referring to? What you see above is a 1 page gist of the *entire* publication, which is 95 pages long.

[m-chan]

Let's be realistic... who else would support the child? It's generally the/a parent if not a relative.
You're looking for the Support Test to see if a 'parent can claim' the child as a dependent FIRST before the educational deduction/credit consideration.

It's more challenging if the scenario was different that the student was part-time or left school for a time.

[Carl]

Exactly. Qualifying to claim the dependent is totally adnd completely separate and independent of qualifying to claim the education credits.

[gtorres2021]

Would I need to provide any proof that I helped my child pay for college when filling my taxes or would I just write down how much money I put towards their educational costs?

[macuser_22]

You must *be able* to prove anything that you put on your tax return but do not need to do so unless the IRS (or state) requests that proof.

[Carl]

In the case of a student not providing more than half of their own support, that's rather easy. If the student did not make enough money during the tax year to provide more than half of their own support, that's all the "proof" that's needed. Additionally, if the student had excess financial support the student paid taxes on, then since that does not count as the student providing their own support, that does it too.
My own son had an internship where he earned $17K in his junior year. Technically speaking, he could have earned a million dollars and I would still qualify to claim him. That's because of the way the IRS looks at things.
 First, scholarships & grants are applied to qualified education expenses. The only qualified expenses for scholarships and grants are tuition, books, and lab fees. that's it. If there is any excess, then it's taxable income. It automatically gets transferred as follows depending on what type of 1040 you’re riling.
1040-EZ excess scholarship income is included on line 1.
1040-A excess scholarship is included on line 7.
1040 Excess scholarhip is included on line 7.
Next, 529/Coverdell funds reported on 1099-Q are applied to qualified education expenses. The qualified expenses for 1099-Q funds are tuition, books, lab fees, AND room & board. That's it. If there are any excess 1099-Q funds they are taxable. The amount is transferred as indicated above with one exception. For the 1040 excess ESA/QTP funds get transferred to line 21 with the annotation “SCH” next to it.
Finally, out of pocket money is applied to qualified education expenses. The only qualified expenses for out of pocket money is tuition, books, and lab fees. Room & board is NOT a qualified expense for out of pocket money.
WHile my son did make $17K, he spent it on big boy toys and a few cruises over the spring and summer breaks. None of that counts as providing one's own support. I paid his rent and food and books, while his tuition was covered 100% by scholarships.
So it's actually not me that would have to prove anything, since there is no requirement for me as the parent to provide one single penny of support. The requirement would be on my son to prove that he provided more than 50% of his own support. The 17K he earned wouldn't even cover the first quarter of the tax year. So nothing to worry about.

[fguilday]

HI there, do you know if unpaid college loans count as support? 

And can you please cite your resource for your answer? (The student wants to claim himself in order to get the CoVid payment), but we have been claiming him based on our home being the primary residence. 

[Carl]

HI there, do you know if unpaid college loans count as support?

There are only two possible ways the student  can have any claim to providing more than half of their own support. It's also possible with both ways that it's physically impossible for the student to have any claim to providing more than half of their own support.

1) If the student had a W-2 job or was self-employed and the student has "EARNED" the income by going out and actually "doing something" to earn it on a recurring basis. The amount earned would need to exceed the amount of all third party support received from all sources.

2) If the student is the *PRIMARY* borrower on a *QUALIFIED* student loan, and a sufficient amount was distributed to the student during the tax year, that exceeds the total of all third party support received from all sources.

Even with both of the above, it's perfectly possible for a student to have earned say, $500,000 and still not qualify to claim they provided more than half of their own support.  If the total of all third party support received from all sources is more than half of what the IRS considers "reasonable" support, then it doesn't matter how much the student earned or borrowed. They have no claim to providing more than half of their own support. Period.

For example, if an undergraduate college student has $30,000 in scholarships, grants, 529 funds (all of these are third party sources) and the student had a job and earned $100,000 in the tax year, it is highly unlikely the cost of the student's support for the tax year exceeded $60,000. (Double the third party support).

Support includes tuition, books, lab fees, food, housing, transportation, clothing, and entertainment. If an undergraduate college student with $30K or more of third party support claims they provided more than half of their own support regardless of that student's earned income, it's a fair bet that 24-36 months after filing with such a claim, the IRS will audit that student requiring them to prove it.

Now if you think doing something such as steak & lobster for lunch and dinner everyday in your $5000/month penthouse suite that you get to in your $80,000 BMW will justify your claim, think again. The IRS expects costs to be reasonable. An $80K BMW parked at a $5000/mo penthouse suite for an undergraduate college student is not reasonable by any stretch of the imagination.

[cshull556]

My daughter is a freshman in college and lived on campus from September on. She did not live with me the whole year, so does her status change when I answer the question "Is Emily's info the same for 2019?"