Can Graduate Students Still Be Claimed as Dependents on a Tax Return?
If your child is in graduate school, you might still be able to claim her as a dependent on your tax return, especially if you're pay the bills. To qualify, your child must meet all the criteria for being either a qualifying relative or a qualifying child. If he doesn't meet either set, you can't claim him on your tax return as a dependent.
Usually, you can't claim your child as a qualifying child unless he's under 19 years old at the end of the year. However, if he's a full-time student, the age limit gets bumped up and you can claim him until the year he turns 24 years old. Also, if you claim the student, no one else, including the student, can claim his exemption. The IRS doesn't impose any age limits on the age of your child if you're claiming him as a qualifying relative. In addition, to claim a graduate student as a qualifying relative, nobody else can claim him as a qualifying child. For example, if your nephew meets all the other criteria to be claimed as your qualifying relative, but he could also be claimed by his parents as a qualifying child, you can't claim him.
To claim your child as a qualifying child, she must live with you at least half the year. However, the IRS makes an exception for time she spends going to school. For example, if your daughter only lives with you for two months during the summer because she spends the rest of the year living on campus at her graduate school, she still qualifies. For the qualifying relative requirements, your daughter does not have to live with you because she is considered a "relative who does not have to live with you."
Both the qualifying child and qualifying relative criteria include support tests, but the tests are different despite sounding similar. Support includes things like rent, food, education, clothing and entertainment costs. For qualifying children, the rule is that your child can't provide more than half his own support. For qualifying relatives, the rule is that you must provide more than half your child's support. For example, say you provide 45 percent of your child's support, he provides 35 percent and your parents chip in the last 20 percent. You qualify to claim him under the qualifying child test because he doesn't pay for half his support, but you don't qualify to claim him as a qualifying relative because you don't provide more than half his support.
Gross Income Limits
If you're claiming your daughter as a dependent child, you don't have to worry about how much gross income she has. However, to meet the tests for being a qualifying relative, the daughter's gross income can't exceed the value of an exemption -- 3,800 as of 2012. Gross income includes all taxable income before accounting for any deductions. For example, if your daughter has a work-study job at the graduate school and earns $4,500, you can't claim her as a qualifying relative.
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."