American Opportunity Credit

[KumarB]

Taxpayers dependent is 23 years old, a full time college student and earned approximately $13,000.00 for tax year 2013. Can the parents still claim him as a dependent and also claim the tuition paid??? I know if dependent files tax return, he cannot claim his own exemption since parents will claim it on their taxes!

[David1980]

Does the student provide over half their own support?

[KumarB]

Does the student provide over half their own support?

The student does not provide more than half of his own support.

[ddoshan]

The student does not provide more than half of his own support.

He made 13000, plus did he take out any school loans which would count as support provided by him.

... if he did not provide over half of his own support then yes the parents could potentially claim the education credit that they qualify for.

[John of PA]

Would not the parents have to show that they provided more than half the support? If the student made 13,000, then the parents would have to show total support of 26,000? Is that possible?

[geekgirldany]

Every situation is different but I also do not see how he/she can make $13,000 and not provided over half support. Support would have to be high.

[Lion]

The parents have to provide only $13,001 in support. Housing, utilities, car, car insurance, health insurance, food, vacation, and on and on. Just completed a return where health insurance (NOT including dental) was over $40,000 for a family of four, so over $10,000 per person. I have clients that give their college kids $12,000/year in an allowance alone. I can't get any of them to adopt me!

[appelman]

No, they would not.

Would not the parents have to show that they provided more than half the support? If the student made 13,000, then the parents would have to show total support of 26,000? Is that possible?

They just have to show that the child is not providing more than half his support. And nothing says that the 13K earned by the child has to be used for support.

[Gretel]

I agree with Appleman under the assumption that child still lives at home with all the exceptions being absent for school included.

I have a similar situation but the student lives in her own apartment for good. In that case child can only be claimed as qualifying relative with the income limitation of $3,900.

[David1980]

If in doubt you can always use a support worksheet. Support items paid by the student including with student loans support provided by student. Then is it more than half of support, or not? Student loans is the main thing that gets overlooked I think on students.

[ruthes]

Aoc

From what I always understood and did with my daughter. When the child is still in college, up to 24 years old, the parents can still claim them as a dependent. The income is not a deciding factor until it gets up to the point they are totally self supporting.

[David1980]

From what I always understood and did with my daughter. When the child is still in college, up to 24 years old, the parents can still claim them as a dependent. The income is not a deciding factor until it gets up to the point they are totally self supporting.

The student must be a dependent for whom the taxpayer can claim an exemption on the parent's tax return. So it falls to the dependency rules.

Support for children under age 24 and a student is often confused. The parent doesn't have to provide any support at all. So, in that regard the support does not matter. However, if the student provides over half their own support the student cannot be claimed as a dependent on their parent's return.

For example, say the total support for the student under age 24 is $25k for the year. The student pays $10,000 with student loans (support provided by student). The student also has a job and makes $3,000 which they use towards their support. The student has now provided $13,000 of the $25,000 of support and cannot be claimed as a dependent. Which means the parent can't claim the education credit.

Now maybe the student put all of their job income into savings account. The facts of course vary a lot from student to student. I always hope there's a land slide of support one way or the other. Parents that are paying everything or students that are paying everything, as it's easy to just say "Yup, that's a dependent" or "Nope, no dependent for you". When it's close like in my example I'd probably start going through the worksheet. http://www.irs.gov/publications/p501...link1000292527

Another potential issue with the college students under age 24. Which Gretel brought up. Say the child has permanently moved away from home. It's no longer a temporary absence, so the residency test wouldn't be met for qualifying child. Now you're at qualifying relative rules and the parent must provide over half the support and the child can't have more than $3,900 gross income. Same example as above, but say the job pays $5,000 and the child has permanently moved out. Fails qualifying child rules due to residency test. Fails qualifying relative rules due to gross income test.