When is a young adult exempt from taxes when filling out tax forms?

[debr1]

I have a daughter who is still dependent on my taxes (last year) She graduated this June and will have an Americorps job Sept-Aug 2015 (13,000) They told her she could claim "exempt" when filling out her tax forms. Is that okay, I thought if you were dependent on someone's return, you couldn't make over 1000. We live in Ct.

[DoninGA]

Assuming this is for tax year 2014 and not 2013, how old will she be on 12/31/2014?

[debr1]

22yrs old in July

[debr1]

I read one place under 14000 was exempt, another if they were dependent, 1000 was exempt. She will be independent next year since she will be completely out of school if grad school is put off.

[DoninGA · Accepted solution]

You may be able to claim your daughter as a dependent under the qualifying child rules for tax year 2014 since she was a full time student for at least 5 months during the year and she is under the age of 24 in 2014.  

If she is receiving wages reported on a W-2, she does not have to file a tax return if the wages are under $6,200 for tax year 2014 since she would be claimed as a dependent child.  She could submit a W-4 to the employer claiming exempt if  -

See IRS Form W-4 - http://www.irs.gov/pub/irs-pdf/fw4.pdf

I claim exemption from withholding for 2014, and I certify that I meet both of the following conditions for exemption.

• Last year I had a right to a refund of all federal income tax withheld because I had no tax liability, and

• This year I expect a refund of all federal income tax withheld because I expect to have no tax liability

To be a qualifying child -

1. The child must be your son, daughter, stepchild, foster child, brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant of any of them.

2. The child must be (a) under age 19 at the end of the year, (b) under age 24 at the end of the year and a full-time student or (c) any age and permnaently and totally disabled.

3. The child must have lived with you for more than half of the year. Temporary absences while away at college are considered living with you.

4. The child must not have provided more than half of his or her own support for the year.

5. If the child meets the rules to be a qualifying child of more than one person, you must be the person entitled to claim the child as a qualifying child. 

6. The child must be a U.S. citizen or U.S., Canada or Mexico resident for some portion of the year.

7. The child must be younger than you unless disabled.

[debr1]

Thanks, I understand she can be a dependent, her question was can she claim "exempt" on her pay forms? What is the limit she can earn to have them take less taxes out? I never claimed exempt as a young adult but some do so they don't have to file and just get more in their check. I was confused on the criteria.  Thank you again.

[DoninGA]

She can claim exempt, at least for 2014, if she had no tax liability in 2013 (no tax return filed in 2013 because of no income would satisfy this requirement or she received all the taxes withheld as a refund for her 2013 income) and she expects to have no tax liability in 2014 (she is only going to have income for 3 or 4 months in 2014 and as you noted she is only going to receive $13,000 for 12 months.  Approximately $1,083 per month) since her income in 2014 is going to be less then her standard deduction of $6,200.