Rules for claiming college students as dependents
If your child meets these requirements and is a full-time college student, you can claim them as a dependent until they are 24. If they are working while in school, you must still provide more than half of their financial support to claim them.
Cons of Claiming a College Student as a Dependent
If your child has earned income and you claim them as a dependent, they lose the opportunity to claim their own personal exemption (when applicable in future years) and certain tax credits that could be more advantageous for them.
Do students have to file a tax return? College students must file a tax return if they made over a certain income. That income threshold depends on multiple factors, including if you are a dependent or married. Generally, if you're a single student who made more than $12,950, you will have to file a tax return.
A dependent student is assumed to be financially supported by their parents, is usually under the age of 24, unmarried, without dependents, and not a veteran or currently serving in the U.S. military.
If you're still interested in claiming dependents, but your child doesn't meet these tests, your college student can still be your dependent if: You provide more than half of the child's support. The child's gross income (income that's not exempt from tax) is less than $4,700 in 2023.
Parents cannot opt out of claiming you on their tax return to get a larger financial aid package. Even if a student files their taxes separately from their parents, they may still be considered dependent on the FAFSA.
Even if a parent or guardian claims you as a dependent, you will still have to file a return if your gross income is over the annual threshold. You can always work with a Tax Pro to sort out what the best way ahead may be for you.
Minors who qualify as dependents on their parent's tax return don't have to file a separate return until their income exceeds certain limits. To be a dependent, a minor must generally: Be under the age of 19 (or 24 if attending school on a full-time basis) Live with their parents for more than 50% of the year.
A full-time student is a legal tax status for determining exemptions. Generally, full-time is considered being enrolled in at least 12 credit hours in a post-secondary institution; however, each institution defines full-time independently.
The child must have lived with you for more than half of the year.2 3. The person's gross income for the year must be less than $4,300.3 Gross income means all income the person received in the form of money, goods, property and services, that isn't exempt from tax.
As a parent, you can claim the same amounts on your dependent child's tuition and mandatory fees, that is: American Opportunity Tax Credit (AOTC): 100% of the first $2000 of tuition and mandatory fees up and 25% of the second $2000, to a total of $2500 per year per dependent child.
To meet the qualifying child test, your child must be younger than you or your spouse if filing jointly and either younger than 19 years old or be a "student" younger than 24 years old as of the end of the calendar year.
College students who are funding more than half of their living expenses could see a financial benefit from filing independently. To file as an independent, however, a college student must provide for more than half of their financial needs. This includes housing, tuition, food, clothing, transportation, and more.
Student must be claimed as a dependent on the tax return; Student must be under age 22 on the last day of the tax year (born 2003 or later); Student must attend full-time.
Relationship: Must be your child, adopted child, foster child, brother or sister, or a descendant of one of these (grandchild or niece/nephew). Residence: Must have the same residence for more than half the year (exceptions apply). Age: Must be under age 19 or under 24 and a full-time student for at least 5 months.
Whether a dependent has to file a return generally depends on the amount of the dependent's earned and unearned income and whether the dependent is married, is age 65 or older, or is blind. A dependent may have to file a return even if his or her income is less than the amount that would normally require a return.
College students may still want to file a return even if it's not a requirement. "If wages are less than $13,850, the student should still consider filing to receive refunds from federal and state withholding taxes," says Michael Trank, a CPA and personal financial specialist at Wertz and Company in Irvine, California.
Now, a question arises: why does the Child Tax Credit cease when the child attains the age of 17? Though it may appear random, the logic behind this lies in societal norms that align 17 with the coming-of-age stage. This age has typically marked the end of school and the start of either higher education or employment.
Yes, your parents can claim you as a dependent after the age of 18 indefinitely as long as you meet the qualifying household and financial support requirements.
Do You Have to File Taxes If You Made Less than $5,000? Typically, if a filer files less than $5,000 per year, they don't need to do any filing for the IRS. Your employment status can also be used to determine if you're making less than $5,000.
More In Credits & Deductions
You can get a maximum annual credit of $2,500 per eligible student. If the credit brings the amount of tax you owe to zero, you can have 40 percent of any remaining amount of the credit (up to $1,000) refunded to you.
You can only qualify as an independent student on the FAFSA if you are at least 24 years of age, married, on active duty in the U.S. Armed Forces, financially supporting dependent children, an orphan (both parents deceased), a ward of the court, or an emancipated minor.
Independent students become eligible for more grants and subsidized loans. Additionally, their dependency status impacts the maximum federal student loans they can secure. For instance, independent students are more likely to qualify for the maximum Pell Grants due to their lower EFC.
Claiming a dependent on your tax return can significantly reduce your tax bill or increase your refund.