My 19 year old son is paying his own college tuition. He has no significant income or deductions.
Apparently claiming him as a dependent is worth more to me than a Federal deduction would be worth to him; so I am claiming him as a dependent. On the NYS form he can claim a deduction anyhow, not that he would be paying much taxes anyhow. But when I run it through TaxCut, it says he can't take a deduction because he did not take an itemized Fed deduction. Is that right? It is pretty confusing, and I just want to be sure. Thanks.
Yes, it is confusing. There are personal exemption deductions (for yourself and your spouse if married), dependent exemption deductions, and either standard or itemized deductions for various types of personal expenditures. (Not to mention AMT, but that's another issue). It sounds like you are mixing some of these up. The NYS situation is not familiar to me but in general some states may require you to take standard or itemized deductions just as on the federal return, and others don't. Whether or not your son is your dependent is not a matter of choice, he either is or isn't based on the facts and circumstances. For example, his income doesn't matter when figuring where his support, only what it cost and who paid for it. You say he is paying his own tuition but has no significant income, that tells me he is paying for it with some combination of savings, gifts, or loans. If he paid more than half of his own support, he cannot be your dependent. You either need to spend a lot more time reading the IRS publications or seeing a human tax professional. You mention TaxCut, I believe with that product you have the option of moving from a self-service approach to an assisted approach at some additional cost but you may also get enough help from other replies here to complete the tax return yourself.
I think the answer is that you have to crunch the numbers. It can be advantageous, but not necessarily in each & every case. ___________________________________
I'm not a tax pro, and it's been a few years since I have dealt with the NY college tuition credit for my own kids, but you can get more information from New York Publication
10W, available here:
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Based on a quick read of this eligible students may claim either a tax credit or an itemized deduction - HOWEVER, neither seems to be available to anyone who is claimed as a dependent on another person's NY State tax return. If you son is your dependent and if you had paid the tuition you would be eligible for the credit or itemized deduction.
-- Vic Roberts Replace xxx with vdr in e-mail address.
It seems that question 4 in the Q&A says that you can also choose to claim the itemized deduction though your son paid the tuition. So, you seem to have the option of choosing either the credit or the deduction, which ever produces the greater reduction in your state income tax.
-- Vic Roberts Replace xxx with vdr in e-mail address.
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