Can I Take a Federal Tax Deduction for My Son While He's Away at College?
Each exemption that you claim allows you to deduct a certain amount from your taxable income for the year. For example, in 2012, claiming your son who is away at college as your dependent would reduce your taxable income by $3,800. However, to claim him, he has to meet either the IRS criteria as your qualifying child or qualifying relative.
Both the IRS criteria for qualifying children and qualifying relatives require that your son live with you. Qualifying children must live with you for at least half the year. However, temporary absences for college count as time your son lived with you, so if he lives with you for three months and spends the other nine months in the dorms at school, he meets the residency test. There is no residency requirement for a qualifying relative who is also your son.
Other Criteria for Qualifying Child
Besides the residency test, your son must meet the age test, support test and joint-return test for you to claim an exemption for him on your taxes. Assuming your son is a full-time student, you can claim him until the year he turns 24. If he's not full-time, you can claim him only until the year he turns 19. The support test requires that he provide less than half his own support. Finally, you can't claim him if he files a joint return with someone else, unless it's only to get a refund.
Other Criteria for Qualifying Relative
If your son doesn't meet the criteria for a qualifying child, you might still be able to claim him as a qualifying relative. His gross income for the year has to be less than the value of the exemption, and you must provide more than half his support. Gross income includes all income not exempt from taxes. For example, if in 2012 he earns $4,200 at a part-time job, you can't claim him.
In addition to the tax savings of the exemption, claiming your son on your taxes may allow you to claim one of the education tax breaks for the expenses you pay on his behalf, including the American opportunity credit, lifetime learning credit or tuition and fees deduction. The American opportunity credit will expire at the end of 2012 if it is not extended and be replaced by the Hope credit. In addition, if you take out a student loan to pay for his education, you can deduct the interest only if you claim him as a dependent in the year you take out the loan.
Based in the Kansas City area, Mike specializes in personal finance and business topics. He has been writing since 2009 and has been published by "Quicken," "TurboTax," and "The Motley Fool."