If I don't qualify for Child Tax credit b/c AGI is too high, is it better to not claim them as a dependent and have them file a separate return for their cap gains, etc.?

[ltoerien]

I don't seem to have a benefit to claim my 18 year old as a dependent - he is at college. He has some capital gains as well as dividends. We also don't qualify for the education credit, so if I don't claim him as a dependent, I was hoping that he would be able to. Is this the case?

[xmasbaby0 · Accepted solution]

You are confused about a few things. First, you cannot get the child tax credit for a child who was older than 17 in 2018; you can only get the $500 credit for other dependents.

Second, the rule is that if a child CAN be claimed, the child cannot say on their return that they cannot be claimed in order to circumvent the parents' income limits for the education credits.  

If your son is an 18 year old full-time student you CAN claim him as a dependent, even if he is away at school.  Being away at school is a "temporary absence."  

If he has unearned income to report on a tax return, it may be subject to the "Kiddie Tax."

KIDDIE TAX

https://ttlc.intuit.com/questions/1900671-what-is-the-kiddie-tax