<p>My son graduated from college in May of last year, and started working full time in August. He lived at home for a couple of months over the summer, but not during the time he was in college or working. We provided all of his support from Jan 1-Jul 31st, but on Aug 1st, he was completely independent.</p>
<p>I have no idea whether we can claim him on our taxes as a dependent, or if he should claim the exemption for himself. He has a good income, but since it was only for part of the year, I think it would be more beneficial if we claimed him. Unless that benefit goes away with the AMT.</p>
<p>I tried looking this issue up on the IRS website, and it is not clear at all. I know this will be an easy one for some of you to answer!</p>
<p>When we were faced with this same situation, it was zero benefit to us to claim our graduating D (yes, AMT).
Have your accountant /Turbo Tax run it both ways and see…</p>
<p>Unfortunately we can’t have the accountant run it now, as we file for an extension and won’t work all this out until October. I was trying to figure it out before then, so our son could file earlier with that knowledge. </p>
<p>But if the AMT knocks out the exemption anyways and it’s zero benefit to us, then he should definitely take the deduction instead of us. Thanks!</p>
<p>It depends largely on his expenses and his new income. Consider all costs associated with supporting her for the year, and who paid those costs. If she paid the majority of those costs (either through income, or loans taken out in her name and not by you) then he claims herself.</p>
<p>If you have already claimed the American Opportunity Credit 4 times, it can’t be claimed for him, and with 5 months of income she probably would get the same amount as you anyway. I wouldn’t worry too much about AMT, as the tax rates went up, so fewer people are subject to AMT this year, but tax benefits still might phase out. As gosmom suggested, you can always look at both options, and see which is better, but I betting it’s going to fall in favor of her claiming herself.</p>
<p>We paid his tuition and housing/food expenses, and with the high cost of tuition it was probably about 25-30K since Jan. I’m not sure if tuition is included as support. His cost to support himself since August has probably been 10-12K.</p>
<p>We have never claimed any education credits, and the AMT chokes the life out of us every year, so I know we’ll be hit with it as usual. Since it sounds like the AMT phases out personal exemptions, I’m sure it would be worthless for us to take it. I wonder if choosing who takes the personal is exemption is a choice in these situations, as opposed to as who must claim it (if anyone).</p>
<p>It seems like in these partial year situations, perhaps it is more of a choice than a hard and fast rule. I don’t want to run afoul of the IRS, but it would be good to choose the most tax beneficial option for all of us. I’m just thrilled to not have to pay tuition for him anymore.</p>
<p>It’s a hard, fast rule, not a choice. Whether the IRS will question anything is another matter.</p>
<p>You have to determine how much support your son provided himself during the year and how much you provided. IRS Pub 501 has the rules starting on page 13. </p>
<p>For the support test there is a worksheet on page 16. You get to include in the support you provided the fair market rental value of your home for the time he lived there or was away temporarily for the purpose of education or business. To do it right, go through your son’s checking, savings, credit card accounts and see how much he actually spent on his support if it’s close. Given what you’ve said at a high level it does seem you can claim him.</p>
<p>If you can claim him, but choose not to, he still can’t take his own exemption:</p>
<p>ETA: Though I don’t know about the AMT. You mentioned it phases out exemptions. If true, I don’t know if that qualifies as being unable to claim him for the purpose of him taking his own exemption.</p>
<p>months living at college count as months lived with you. S/he needs to live with you for more than half the year (183 days) to be considered a qualifying child.</p>
<p>All the elements of what constitutes “support” are spelled out. See Worksheet 2 on page 16. Education expenses are part of support.</p>
<p>The child, if s/he meets the criteria for “qualifying child”, can make a fair amount of money, but if s/hebanks most of it insteadof paying for her support ( ie,the parents cover her room, board, insurance, tuition) then it counts as support YOU paid. See page 20 “A person’s own funds are not support unless they are actually spent for support.”</p>
<p>Thanks for the info, all. I’ll look closely at those publications when I get a chance. I’m not sure that he could take the American Opportunity tax credit or any education credits if he didn’t pay the bill, though.</p>
<p>This is what our son found on Turbo Tax (he does his own taxes):</p>
<p>"Whoever claims your dependency exemption is entitled to claim a credit or deduction for your education expense.</p>
<p>If your parents are claiming you as a dependent then they will able to use the education expenses they paid for purposes of determining an education credit or deduction. If you claim your own exemption, you can use the amounts paid by your parents to determine an education credit on your own tax return…"</p>
<p>We did run it past our accountant who confirmed that is correct. In our case, our son was on his own for more than half of the year.</p>
<p>We claimed D as a dependent for every year so far, since we have always provided 100% for her. S we allowed to have claim himself as an exemption the year after he graduated, since he did not live with us for 6 months or more. He provided most of his own support for the years since his graduation. We basically let the accountant figure things out and the accountant would ask us if he had any questions. It has worked out fine for all of us. I believe we got whatever tax credits we could for paying for our kids’ educations.</p>
<pre><code>Your son, daughter, adopted child1, stepchild, foster child2 or a descendent of any of them such as your grandchild Brother, sister, half brother, half sister, step brother, step sister or a descendant of any of them such as a niece or nephew
</code></pre>
<p>Age</p>
<pre><code>At the end of the filing year, your child was younger than you (or your spouse if you file a joint return) and younger than 19
At the end of the filing year, your child was younger than you (or your spouse if you file a joint return) younger than 24 and a full-time student
At the end of the filing year, your child was any age and permanently and totally disabled3
</code></pre>
<p>Residency</p>
<pre><code>Child must live with you (or your spouse if you file a joint return) in the United States4 for more than half of the year
</code></pre>
<p>__</p>
<p>“At the end of the filing year, your child was younger than you (or your spouse if you file a joint return) younger than 24 and a full-time student”</p>
<p>This is one of the requirements for ‘qualifying child.’ It would appear that a college grad (grad in May or June) would NOT be a qualifying child by “END of the filing year” because that 20-24 year old would no longer be a full-time student and thus would be disqualified just by being over 19.</p>
<p>Interesting information, I guess you have to read every word and interpret. I looked over some of this too, and they even cover situations for kidnapped children. We have such a complex tax system, it’s stressful to even start thinking about it. I think we’ll all just file for an extension!</p>
<p>I will have this problem with the 2014 taxes. I paid all the dues for my graduating student in 2013. Is he my dependent for 2014? He will still live off the money I provided for 6 months of 2014, but I spent that money in 2013.</p>
<p>The way I did it: S1 was at school until May, left for a paid (minimum wage) internship out of state in July. Went to find a job in October elsewhere out of state. Got a job in November. Since his internship was temporary, the IRS allows me to claim him through the end of the internship in September (he stayed on with them another month). I paid for over half of his living expenses for the year, and he is under the age of 24. </p>
<p>I worked it out on Turbotax both ways. If he was independent he could claim some college education credit and job relocation (internship subsequent job, and new job in another city in the same field) expenses. It worked out to just $500 benefit for him to be independent but close to $3,000 dollars for me for him to be my dependent. He will be declared my independent for 2012 and I will pay $500 towards his taxes. </p>
<p>I cannot for the life of me think of a situation where my child would be older than me. Why is “younger than you” even part of the criteria? </p>
<p>Nevermind, I just read all the possible relationships. It seems like the wording should be “the child” not “your child” if it could be a half sibling or their descendants. </p>