Good Reasons
If your income disqualifies you from claiming these credits, your child's income probably doesn't disqualify him or her. Therefore, your child may be able to report payment of education expenses for tax purposes and then claim one of the credits – but only if you don't claim him or her as a dependent.
3. 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.
Claiming your college student as a dependent on your tax return means potential tax savings! On the other hand, it could mean adjustments (including penalties and interest) if you claim them when you shouldn't.
How long you worked has no bearing on claiming dependents. Either you qualify to claim the child as your dependent, or you do not. Work has nothing to do with it.
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.
For qualifying dependents who are not a qualifying child (called “qualifying relatives” in tax law), the person's gross income for the 2023 tax year must be below $4,700 (for 2023). For qualifying relatives, they must get more than half of their financial support from you.
However, to claim a college student as a dependent on your taxes, the Internal Revenue Service has determined that the qualifying child or qualifying relative must: Be younger than the taxpayer (or spouse if MFJ) and: Be under age 19, Under age 24 and a full-time student for at least five months of the year.
If a child lived with each parent the same amount of time during the year, the IRS allows the parent with the higher adjusted gross income (AGI) to claim the child.
As a dependent student, your annual and aggregate federal student loan limits are typically lower than those for independent students. However, your parents can apply for a Parent PLUS Loan to help cover your educational costs.
If your dependent is a qualifying child, there is no limit to the amount of income they can earn. Generally, to qualify, the child must meet the specific relationship, age, residency, and support requirements. However, if your dependent is classified as a qualifying relative, their gross income must not exceed $4,700.
There is no age limit for how long you can claim adult children or other relatives as dependents, but they must meet other IRS requirements to continue to qualify. Additionally, once they are over 18 and no longer a student, they can only qualify as an "other dependent," not a qualifying child.
Once your child reaches the age of 18, they are considered an adult in the eyes of the IRS. However, if they are still a full-time student, you can continue to claim them as a dependent until they turn 24. Once they are no longer a full-time student, you must stop claiming them.
Age - the child must be under age 19 or a full time student under age 24 at the end of the year. Residency - the child must live with the taxpayer for more than one-half of the year. The child is considered to live with the taxpayer while he or she is temporarily away from home.
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.
It's important to note that if two or more taxpayers claim the same child, the IRS will use the “tiebreaker rule” to figure out who is eligible. You can always speak about your specific situation with your Jackson Hewitt Tax Pro when questions arise.
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.
Qualifying child
Age: Be under age 19 or under 24 if a full-time student, or any age if permanently and totally disabled. Residency: Live with you for more than half the year, with some exceptions. Support: Get more than half their financial support from you.
Changes to Certain Benefits
The five dependency tests – relationship, gross income, support, joint return and citizenship/residency – continue to apply to a qualifying relative. A child who is not a qualifying child might still be a dependent as a qualifying relative.
The American Opportunity Tax Credit
You can claim the AOTC for a credit up to $2,500 if: Your student is in their first four years of college. Your income doesn't exceed $160,000 if you are married filing a joint return. Your income doesn't exceed $80,000 as a single taxpayer.
What's the penalty for filing as head of household while married? There's no tax penalty for filing as head of household while you're married. But you could be subject to a failure-to-pay penalty of any amount that results from using the other filing status.
You can claim the Child Tax Credit for each qualifying child who has a Social Security number that is valid for employment in the United States. To be a qualifying child for the 2024 tax year, your dependent generally must: Be under 17 at the end of the tax year.
Earned income includes salaries, wages, tips, professional fees, and taxable scholarship and fellowship grants. Gross income is the total of your unearned and earned income. If your gross income was $5,050 or more, you usually can't be claimed as a dependent unless you are a qualifying child.