- Can I Take a Federal Tax Deduction for My Son While He's Away at College?
- Can Graduate Students Still Be Claimed as Dependents on a Tax Return?
- Are There Any Tax Deductions for a Son Who Does Not Live With Me But I Pay for College?
- What Deductions Can My Child Use When I'm Claiming Him on My Taxes But He Works?
- Do I Claim My 19-Year-Old on My Taxes?
- Can I Claim My Adult Child as a Deduction?
The federal tax exemption for each dependent is $3,800 as of the 2012 tax year, so it's understandable that parents want to continue claiming their children for as long as possible. Most college students still qualify as dependents, although the Internal Revenue Service does impose some restrictions.
If your child does not go to college, he ceases to be your dependent if he turns 19 on or before Dec. 31 of the tax year. If he does go to college, this age limit extends to 24. He must live with you for more than six months of the year, but living away at school is a "temporary absence" that does not count against the six-month period.
Your child must be a full-time student. Taking just a few credits each semester won't qualify him. He must also be enrolled for five months of the year. If he takes the summer and one additional semester off, you'll lose the deduction.
If your child works while attending school, his earnings can't contribute more than half to his own support needs. If he's just working part-time for some extra spending money, this is rarely a problem. If he earns $20,000 a year, however, you'd have to substantiate to the IRS that his living expenses were at least $40,001, and that you paid $20,001 of those costs. His tuition doesn't count as a living expense.
Your child is limited as to how he can file his own tax return if you can claim him as a dependent. If he meets all the IRS criteria as a qualifying child, he's your dependent, even if you don't claim him. Therefore, he can't claim a standard exemption for himself on his own tax return. If he's married, he can't file a joint return with his spouse unless it's only to claim a refund, and if neither he nor his spouse would have owed taxes if they had filed separately.
Special rules apply to divorced parents. Technically, you're both eligible to claim your child, so the IRS has tiebreaker rules to decide which one of you can do so if there's a dispute. The tiebreaker rules give the dependent deduction to the parent with whom your child lived most during the tax year. This must amount to more than six months. If your child lived with each of you an equal amount of time, the tiebreaker rules give the dependent exemption to the parent with the highest adjusted gross income.
Claiming your college-age child as your dependent might result in a tax credit as well, which reduces your tax bill to the IRS. As of the 2012 tax year, the IRS offers three tax credits for tuition, although one of them is set to expire after 2012 unless legislation passes to renew it. However, these credits phase out at higher income levels, beginning at $160,000 in adjusted gross income for married couples filing jointly.
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