My son was born in 1985 and will still be 23 as of 12/31/08. He was a full-time student through August 2008. Does he qualify as a "Qualifying Child" for tax purposes? The IRS instructions state that he must be "under
24 at the end of the year and a student", but I don't know if that means he must be a student at the end of the year.
He lived in an apartment near his college for most of the year, but I provided more than 50% of his support. He began supporting himself completely in September 2008. Can I claim as an exemption on my 2008 return?
No, only all or part of any five months during the year, they don't have to be consecutive. "Full time student" means whatever the qualifying education institution defines it to be for their students.
Was his permanent residence still with you, or had he established a new residence at his apartment? If so, when? To determine residence, you should consider, where did he have the strongest ties? (in no particular order, including but not limited to: mailing address, bank account branch office, doctors, voter registration, driver license and vehicle registration address, location of employment, family, social connections, property, etc).
All that matters for Qual. Child (QC) is whether or not *he* provided more than half of his *own* support. Remember, support and income for tax purposes are determined independently of one another, be sure you understand what counts as support.
Possibly, but if you cannot claim the dependent exemption deduction, then he probably can claim the personal exemption deduction, and vice versa, but in no case can you both claim the exemption deduction.
There are some less common situations, involving education-related credits, where you are better off not claiming him even though you could
-- he still can't claim himself but might be able to claim certain credits, if he meets all the other requirements. Assuming, of course, you are willing to let him get a tax benefit potentially at your expense.
Just for completeness, please add to my previous reply:
You cannot claim his dependency exemption if you yourself are a dependent, if he is not a citizen or North American resident, or if he is married and filing a joint return with his spouse and does not meet the exception for that situation.
As has already been mentioned, it's a full-time student in any five calendar months of the year.
Probably.
The issue has been raised as to whether or not he "lived with" you for more than half the year, not counting temporary absenses. While that's required for a qualifying child, it's not required for a "qualifying relative" to be a dependent. If he isn't a qualifying child, based on the information you provided he's a qualifying relative for 2008 as long as he passes the citizenship/US residency and joint return tests. See IRS Publication 501.
As has been mentioned, if he qualifies as your dependent he cannot claim his own personal exemption even if you don't. Be sure you coordinate this with him. First, it will avoid the problems that arise if you both claim his personal exemption. Furthermore, as mentioned, it may be to the family's benefit for no one to claim his exemption in order to allow him to claim education tax benefits that may not help you.
You're forgetting the biggie: to be a qualifying relative (QR), he also has to pass the "gross income" test, that is, not more gross income than the personal exemption amount. That is what keeps most from being a QR who might otherwise qualify.
It's not hard for a college student with any part time employment or income from savings/investments to exceed the gross income maximum amount for QR.
Damn! That'll teach me not to look things up. My mind drifted back into pre-uniform nonuniform definitions, when the gross income test was always made irrelevant by the full-time student + age factor. To OP: nevermind.
Mark raises a very good point here, as I have seen parents lose the dependency exemption because of a change in domicile (note that I used the term domicile and not residence).
When a child goes off to college and is not commuting, the child's absence is temporary as long as the child does not change domicile.. the place where an individual has his permanent home, to where whenever absent, he intends to return. Every person has at all times only one domicile. A child's domicile will remain his parent's domicile unless the child forsakes that domicile and intends to remain permanently at a new place where they are physically and lawfully present.
Many states require a visiting student to obtain a driver's license and to register any vehicle brought into the state. Many students open a local bank account to facilitate check cashing and making deposits. Many students obtain employment where they go to school to generate extra money or pay for school. Most students establish new relationships and social connections where they go to school. Most students will obtain medical services where they go to school. Many students will change their mailing address.
So... many of the factors that usually go into determining one's domicile, will work against a student. These changes can be refuted as representing a change in domicile. What really matters are the hard core reasons that go into determining domicile. E.g., Did the child register to vote where he attends college? Did the child apply for in-state tuition if attending college out-of-state? Did the child file state and federal income tax returns using an address other than his parent's address? (Tax Tip: never file a tax return that doesn't use your parent's address.) Do the parent's still maintain a place at their home for the child to live?
That's a good question. He lived full-time in an apartment near school all year, but he continued to use our house as his mailing address for his bank accounts, driver license, voter registration, etc. He never received any mail at his apartment, but that's where he actually lived all year.
Well, we paid for his rent, his car expenses (including insurance), his phone and his health insurance. He paid for his meals and entertainment. His tuition and books were paid through scholarships. His total income was probably around $10,000.
I don't believe he can claim education credits because his actual tuition expenses were covered by scholarships. If I claim him as an exemption (rather than him claiming himself), I can claim all of his medical and health insurance expenses on my medical deductions. If he claims himself, I'm not sure I can still do that.
If the only reason he is not your dependent as a qualifying relative is because of the gross income test, then you are allowed to deduct all medical costs you paid for him.
This is the first time I've heard domicile used in relation to the tests for dependency, usually it's in the context of being a resident of one state or another. Thanx for giving me a new way to look at it, one of the benefits of this discussion group.
A further analysis would probably have to take into account age as well. For example, in the case of a younger child splitting time between the households of custodial and non-custodial parent, where would the domicile be, and can it change from year to year depending on where the majority of nights are spent? What about the college student whose parents split up, or move to a smaller "empty nest"? Determining his or her domicile might be more challenging. Nowadays, with college students typically taking more than four years to finish, could you say that the
18-year old freshman "intends to return to the vicinity of campus whenever absent" for the next 5-plus years, and then to wherever the first post-graduation job is?
As a practical matter, I'm guessing it rarely gets audited as long as only one tax return claims the exemption. If a student is ready to cut the financial ties and provide more than half of his (her) own support, where he lives becomes irrelevant for determining dependency, as no one who supports themselves can be (claimed as) a dependent.
My comments were meant to specifically address what happens when a child goes off to college. In this instance, I believe domicile is important because we need to define temporary absences for education.
You do raise an interesting issue relating to when a child departs a residence that is home for both parents and while attending school, the parents split up. Assuming that the child has no intention to make his residence at school his new domicile, then he keeps his old domicile. If one of the parents still maintains that domicile, we have our answer unless the child decides to change domiciles. If the parents sell that home and each parent moves into a new home, with whom is the child living? I think you now look to intent. Where does the child intend to live for more than six months in the year? Basically, it means the child is going to determine who gets the dependency exemption assuming the child is not self-supporting, is still under age 24, a full time student and the parent of choice agrees to provide a home for the child.
I agree that as a practical matter, the parents will probably decide who gets the exemption and in those cases where they can't agree, the child is going to make the decision for them based on the child's intent.
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