<p>I’m sure there’s a fairly straightforward answer, but our oldest graduated from college last spring and is currently doing the see-the-country-through-menial-labor tour. One thought he’s had is to try to figure out where he might like to go to graduate school, and settle there for a few years to establish residency. I know residency requirements vary by state, but in trying to figure out what to suggest to help him do that, it occurred to me that at some point he will/should no longer be our dependent for tax purposes. Do I vaguely remember something about claiming them if you provide > half their support? (Sorry for my ignorance–DH took over our taxes years ago.) I’m quite sure that for 2012 he was our dependent, but I guess most likely not for 2013.</p>
<p>I’m not the right person to answer, but I believe it has something to do with whether they live in your home or not. I just know my daughter was our dependent the year she graduated from college because she lived with us until December, but she will not be this year (2012 taxes) since she has her own place. She is still on our health insurance until she’s 26; however. That’s great since she’s working two part time jobs and one free lance, none of which offer health insurance.</p>
<p>Turbotax answered this for us as our DS graduated a few years ago.
I do think it is the ‘you supply >than one half’ their support that determines.
Don’t think address is it…</p>
<p>I’m sure a tax expert CCer will chime in soon.</p>
<p>The legal age seems to be 24, for purposes of applying for residency and financial aid independently of parents. If someone is married, has a child, has served in the military, etc., they can apply at younger ages.</p>
<p>Also, a friend of mine assumed her daughter was still covered by her health insurance - and she was - but found out that dental coverage ended at a younger age!</p>
<p>I believe they are “independent” for the purposes of financial aid when applying to grad school. They can be your dependent on your tax forms if you provide more than 50% of their living expenses irrespective of their financial aid status.</p>
<p>When my S moved to CA, UC suggestions for residency included immediate change of car registration, bank and drivers license. I’m sure a lease or utility name change would help. </p>
<p>Not by any means a tax expert, but I do my own via Turbo, and the impression is I can no longer claim the D who graduated 18 months ago, though living abroad, this is still her permanent address. </p>
<p>Other D, graduated last spring, my impression is that I can claim her due to the ‘half of income’ rule. This is also still her permanent address, though living out of the country. </p>
<p>Will soon have an excess of stuff in storage, yet no tax deduction to show for it.</p>
<p>For financial aid it varies. When I was looking into grad and professional schools most of the schools I looked at considered you independent if you were 24, married, had dependents of your own, OR had a bachelors degree-- so the grad students were independents. Some of the schools I looked at did not have the bachelors degree stipulation, and some raised the age into the 30s.</p>
<p>For taxes there are a few different criteria, and you must meet all 4-- not just half your support.</p>
<p>In general, to be a taxpayer’s qualifying child, a person must satisfy four tests:</p>
<pre><code>Relationship — the taxpayer’s child or stepchild (whether by blood or adoption), foster child, sibling or stepsibling, or a descendant of one of these.
Residence — has the same principal residence as the taxpayer for more than half the tax year. Exceptions apply, in certain cases, for children of divorced or separated parents, kidnapped children, temporary absences, and for children who were born or died during the year.
Age — must be under the age of 19 at the end of the tax year, or under the age of 24 if a full-time student for at least five months of the year, or be permanently and totally disabled at any time during the year.
Support — did not provide more than one-half of his/her own support for the year.
</code></pre>
<p>My parents and I had a huge argument about this last year, which I posted about if anybody remembers. I had already filed my taxes and claimed myself and my parents accountant was arguing and wanted me to submit an amendment so my parents could claim me. I got my own accountant who agreed with me. I did provide more than half my support, though my parents argued that point, but I didn’t meet the age requirement either regardless.</p>
<p>Great info, Emahee and others. It sounds like the fourth test (providing half the support) is sort of up to the parents and kid to determine? (I do feel like I’m still providing most of DS’s financial support although am hoping that changes soon. ) So as long as both parties agree (either the kid is still a dependent or not), the IRS probably doesn’t care?</p>
<p>momofthree (and others)–it also sounds like it’s conceivable that he could be “in-state” (or independent for financial aid?) for grad school in another state but still a dependent on our taxes? (Do dependents ever float on and off–maybe not a dependent this year but then a dependent again in future year?) Although he can’t be a dependent past 24?</p>
<p>greatlakes–have not even tackled what to do with all the kid’s stuff. He took what he needs to survive but there’s still a fair amount here that I have no idea what to do with.</p>
<p>Yes, as Emaheevul07 states,
The ‘rules’ for claiming dependency for IRS purposes and for financial aid purposes are TOTALLY different. The OP was asking about tax purposes I believe.</p>
<p>We have two young adults in our family. One now self supporting grad, no longer claimed by us. The other, age 23, but permanently disabled, lives with us, we provide >half her support. Turbotax has helped us work through both situations.</p>
<p>Since the 1/2 support can be vague to quantify, for the year of May graduations we prepared taxes for us claiming child and for the child claiming self.
For one kid, the tax benefit was greater if we claimed (gave child the refund amount they would have received if claiming self). For another, it worked out better if the child claimed self.</p>
<p>Be careful to submit the correct versions so the child is only claimed once!</p>
<p>For our January grad, there was no question.</p>
<p>Thanks again to all. musicmom–not sure I started out that way but I think I ended up asking about both. We’ve lived in the same state for so long and I really have no idea how to help establish residency after moving + there’s the hoping-to-get-financial-aid-and/or-in-state-residency-for-grad-school thing + that got me thinking about claiming dependents for tax purposes.</p>
Our son was no longer a dependent as far as the IRS was concerned last year. He was 20, living at home, not a student, not working full time, however his earnings went over a certain threshold (couldn’t tell you what that was) and turbo-tax said buh-bye…no longer a deduction for you.</p>
<p>As far as establishing residency, this is going to be different from state to state, but will usually include getting a state DL, registering your car, registering to vote, and other signs that you are there with the intention of staying. You can usually google and get your state’s laws, or call the specific graduate school and they can point you to the regulations.</p>
<p>Non-students are pretty hard to claim as a dependent even if they live at home full time. The income threshold is just under $4000/year so unless there are some physical challenges, any non-student living at home should be working enough to make more than that. Stinks on your taxes though.</p>
<p>Ingerp-
We went through this with DS two years ago. He went to grad school in another state but kept his permanent address here with us.
For FAFSA, he was independent (possessed an undergrad degree).
But for IRS, he still qualified as dependent. We lost him after he graduated and found a ‘real job’ of course. On paper, we lost out not having him as an exemption but in real life, we’re enjoying not paying his way through life anymore!
He’s finally routed his bills to his new address so I don’t even have to think about them.
Ahhhhh.
No real prospect for our DD to be moving out anytime soon though, even though SHE would like to!</p>
<p>Dstark, that’s the plan.
She is on every ‘waiting list’ for residential placement but the lists are looooong.
Unlike many families we know with disabled adult children, we would welcome a placement while we are still around. We don’t understand deliberately waiting until the inevitable of the parents’ deaths to find a new home for the family member. </p>
<p>But we know every situation is unique. Our DD has more strengths/abilities than some and is very social. She has friends in a group setting and would love to be there.
We encourage her to be as independent as possible. </p>
<p>We also, admittedly, would welcome an empty nest though we would always be connected to her for support.
Sorry for the long answer, this is a big topic in our lives!
We wish we could finance a home for her and others but that is not possible for us.</p>
<p>Musicmom, No reason to be sorry about your answer. I understand what you are going through.</p>
<p>I have a 21 year old mentally challenged daughter. At some point, she needs to live somewhere else. Like you said, before we die. The waiting lists are long. Somebody I know did get a residential spot after being on a list a very short time. He took the spot even though the parents weren’t quite ready. It could take years and years to get a spot.</p>
<p>My wife and I aren’t ready. My daughter is great. I don’t want her going…yet.
We started the process of moving her because it might take 5 to 10 years.
I am hoping by the time a spot opens up we are all going to feel good about my daughter leaving.</p>
<p>One of my friends has a S with developmental disabilities. She bought a 8 bedroom home and currently lives in the top floor and rents out the bottom floor to students. Her dream and hope is to turn the home into a group care home so her S can remain there when she retires & moves to a house she bought with her retirement funds. She is working through the regs and thinks she can make this work well for her S & other mildly disabled adults who need a semi-structured environment instead of living totally on their own. I admire her greatly and it looks like it’s all coming together.</p>
<p>We will be having to figure out D’s dependent status in the near future, as hopefully this is her last term as a student. So far, she’s never earned $4000 in any calendar year, so not a big issue yet UNLESS and until she gets a REAL JOB (hope springs eternal in our hearts). Thankfully, her brother has been on his own since 2011 (the year after he graduated).</p>
) So as long as both parties agree (either the kid is still a dependent or not), the IRS probably doesn’t care?</p>