When a child is working FT (28k/yr) - exemption still while living at home?

Parent Cafe
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<p>I was curious : my d just got her 1st FT job post college, and will make 28k per yr. SHe, of course has tons of college loans - I have to ck, but I think it is $300 / month, and she is living at home to ‘save money’. Get it - save money on living costs so that she can pay off college loans and other things… but as anyone knows, there is no such thing as saving money… the conservation of money says if she saves money, we must spend it…</p>

<p>If we dont charge her rent - I have nt thought about it - but she is living at home as she use to pre-FT job, sort of as ‘a kid’, can we still claim her as an exemption ? my guess is that she’ll fill out a tax form next yr and then will file taxes and I assume she’l count herself as one exemption and I am guessing that we cannot count her as an exemption also.</p>

<p>I was reminded of this as I was filling out NPC for my 3rd child who is ramping up the coll search process and I noticed a question on one of the NPCs how many in the household can the parents claim as an exemption? I assume the NPC is trying to ascertain the extent of support . </p>

<p>To reiterate, we might even be spending a somewhat similar level of support (except for discretionary personal stuff ) as when she was a regular old - I mean young :slight_smile: - child …providing water, gas , electric, garbage disposal, shelter, maintenance, rent/taxes/insurance , food, internet, a [basic] phone plan… the usual suspects. I know she wants to buy a smart phone as one of her 1st expenditures - as part of ‘the house pkg’, she just has a cheapo oldtime dumb phone.</p>

<p>COnsidering the recession and the high cost of everything, I suspect the situation of the YA child at home, even w/ a job, is somwhat common nowadays.</p>

<p>One reason I listed the salary here is that a job is not a not job is not a job. I know other recent grads making 75k (the one case I am thinking of is paying own apt and everything , so this is not analogous).</p>

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<p>You will have to read IRS Publication 501. If she just graduated this spring, you may be able to claim her as a dependent and, actually, will only be able to claim the AOC education credit if she is your dependent ( only applicable if you claim the education credit). After this year, her income level will preclude her from being claimed by you as a dependent. Not a tax professional here though soI recommend the above mentioned publication.</p>

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<p>My S lives at our home and makes less than that. We can’t claim him as a dependent. I think the threshold of income for that is pretty low after a certain age, but offhand I don’t recall what that age is.</p>

<p>We do charge him rent, less than what it would cost him on his own. If she does take the deduction, maybe you could charge her that much.</p>

<p>(adding–what makes 28000 not real money? You live in a different world if the norm for college grads is 75K–I’m 55 with two degrees and never seen that much!)</p>

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<p>Second the IRS 501.</p>

<p>We have a disabled young adult D who works PT and earns way less than 28k.
Still, every year I study that info…especially the “providing more than 50%”
Part.</p>

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<p>

Must be under 19 or a full time student if they make over the amount of the standard deduction. After 24, there is no exception to the threshhold amount.</p>

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<p>I am wondering about the same scenario. d graduated college in May, just turned 22 living home and starting a job in September, may only earn 5K for all of 2013. Seems she would be my dependent as she’s been a student for 5 mos of the yr, and I will provide more than 50% of her support. </p>

<p>looking at IRS 501, wondering about that detailed formula, aagh, will have to do that another day after more coffee…</p>

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<p>More coffee…Yes, always when the letters IRS are involved. :)</p>

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<p>There are 2 ways to claim a dependent and they have different rules.</p>

<p>Qualifying child. Has to meet age, relationship, resident and support tests. Age is under 19 or under 4 and a full time student, or disabled any age. Support rule means they can’t have provided more than half their own support.</p>

<p>Qualifying relative: Has different rules, but the one that would apply here is the gross income test. It can’t be more than the personal exemption for the tax year around $3900).</p>

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<p>^yeah, that’s what I recall using to make determination (assuming you mean 24, not 4!) :)</p>

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<p>thanks swimcatsmom—helpful. so in the case of a qualifying child who does meet those tests, there is no income maximum as long as they aren’t providing more than half their own support?</p>

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<p>lindz, your daughter most likely will be your dependent (a qualifying child):</p>

<p>1 - she is your child
2 - she was a full time student for a full term
3 - she lived with you (time away at college counts as a temporary absence) more than half the year, in the US
4 - she did not provide 50% of her own support (note that what SHE provides is relevant, even if you did not provide 50%)</p>

<p>Because she meets these requirements, her own income doesn’t matter - unless it is such that she provided more than half of her own support for the year.</p>

<p>OP - it’s going to depend on her actual earnings in 2013, and her expenses. You will have to calculate her share of the living expenses, and count that as provided by you, along with any tuition, room, and board you paid, or paid by loans YOU took out. Support provided by her would be her income, and any loans taken in her name. If she is supporting herself, she would qualify for the AOC (assuming HOPE or AOC was not already claimed for her 4 times).</p>

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<p>If she will be living at home, probably not paying rent or utilities, possibly not paying for groceries, car, insurances, etc. then the time to sit down and work out a budget for her to follow would be now. A smart phone and use package are luxuries that need to wait until she’s met her other real (student loan) and moral (household expenses) obligations. There are a lot of budgeting tools out there for recent college grads. If she can’t find anything at the public library, she should pay a visit to her bank or credit union and get help with this. Learning the differences between needs and wants is a lifetime skill.</p>

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<p>3bm, I believe there IS an exception…if you have a dependent disabled child, you can continue to declare them after age 24. I’m not a tax expert either!</p>

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<p>I dont see how you could possibly claim a child making 28K per year as a dependent on your tax return, but please feel free to prove me wrong.</p>

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<p>If your child is permanently & totally disabled,
Earning less than $3,800 for the year
And lived with you for more than 1/2 the year,
Then you can claim them as a dependent if they are over 24.
Otherwise no.</p>

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<p><a href=“adding–what%20makes%2028000%20not%20real%20money?%20You%20live%20in%20a%20different%20world%20if%20the%20norm%20for%20college%20grads%20is%2075K–I’m%2055%20with%20two%20degrees%20and%20never%20seen%20that%20much!”>quote</a>

[/quote]
</p>

<p>Seriously. In our region that’s good money right out of school.</p>

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<p>

Not if they provided more than half of their own support. See: [Publication</a> 501 (2012), Exemptions, Standard Deduction, and Filing Information](<a href=“http://www.irs.gov/publications/p501/ar02.html#en_US_2012_publink1000220886]Publication”>http://www.irs.gov/publications/p501/ar02.html#en_US_2012_publink1000220886)</p>

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<p>My understanding of this issue is that I can claim my recent college graduate as a dependent and take the exemption for him this final time. He was a full-time student for the first half of the year, and we did support him for half of the year. He is considered to have been living with us during the months that he was away at college.</p>

<p>The sticky part to me is the “more than half the year” and providing 50%+ of the support. He started his job on July 8, so IMO, we are just over that threshold. </p>

<p>If anyone has a link dealing specifically with this issue and students who graduated from college this year, would be appreciated.</p>

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<p>Found this in a tax advice column:</p>

<p>

</p>

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<p>[Publication</a> 501 (2012), Exemptions, Standard Deduction, and Filing Information](<a href=“Publication 501 (2022), Dependents, Standard Deduction, and Filing Information | Internal Revenue Service”>Publication 501 (2022), Dependents, Standard Deduction, and Filing Information | Internal Revenue Service)</p>

<p>"You cannot claim a person as a dependent unless that person is your qualifying child or qualifying relative. </p>

<p>Tests To Be a Qualifying Child Tests To Be a Qualifying Relative
The child must be your son, daughter, stepchild, foster child, brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant of any of them. </p>

<p>The child must be (a) under age 19 at the end of the year and younger than you (or your spouse if filing jointly), (b) under age 24 at the end of the year, a student, and younger than you (or your spouse if filing jointly), or (c) any age if permanently and totally disabled. </p>

<p>The child must have lived with you for more than half of the year.2 </p>

<p>The child must not have provided more than half of his or her own support for the year. </p>

<p>The child is not filing a joint return for the year (unless that joint return is filed only to claim a refund of withheld income tax or estimated tax paid).</p>

<p>If the child meets the rules to be a qualifying child of more than one person, only one person can actually treat the child as a qualifying child. See the Special Rule for Qualifying Child of More Than One Person described later to find out which person is the person entitled to claim the child as a qualifying child. </p>

<ol>
<li><p>The person cannot be your qualifying child or the qualifying child of any other taxpayer. </p></li>
<li><p>The person either (a) must be related to you in one of the ways listed under Relatives who do not have to live with you , or (b) must live with you all year as a member of your household2 (and your relationship must not violate local law). </p></li>
<li><p>The person’s gross income for the year must be less than $3,800.</p></li>
<li><p>You must provide more than half of the person’s total support for the year."</p></li>
</ol>

<p>.</p>

<p>THEre is an apparent conflict with rules 3 and 4 above: a person living in your house who is not a qualifying child (the OP example, since the OP child is not a FT student at the end of the yr and less than 24), and can make more than 3,800 dollars , but the parent cd literally still pay for more than half of the support for this person.</p>