Is Your College Graduate Child Still Your Dependent?

If you have a child that graduated or is graduating from college this year, you may be wondering if you can still claim them as a dependent on your income tax return.  If you are a single parent and only have one child, this question is even more important because it can change your filing status from Head of Household to the less desirable Single status.

The rules for claiming a dependent are actually lengthy. In order to keep this article short, I’m assuming that your child has qualified as your dependent in prior tax years, so the only year in question is this tax year.  There are 5 tests that must be passed to be a qualifying child, 1) relationship, 2) age, 3) residency, 4) support and 5) joint return.  I’ll review the tests that I think your child may not pass. If your child fails any of the tests, you may not claim them as a dependent. For a more thorough discussion of the rules for claiming a dependent, refer to IRS Pub 17. In this article, I’m assuming that your child passes the relationship test.

Age Test – Your child’s age is determined at the end of the tax year, and your child must be younger than you or your spouse (if married filing jointly). Your child must be under 19 or your child must be under 24 and a full-time student. To be a full-time student, your child must have been a student during some part of any 5 calender months of the year (the 5 months don't have to be consecutive). The definition of Full-time student depends on the particular college. But in many colleges, you must be enrolled for at least 12 hours during any semester.  So, even if your child graduated in May, he does not necessarily fail the age test. Also, your child passes the Age test if he or she is permanently and totally disabled at any time during the year, regardless of age.   

Residency Test – Your child must have lived with you more than half of the year.  The time that your child is away at college is considered a temporary absence, and still counts as time lived with you. So, if your child graduates in May, and comes home and lives with you until July 1st or later, he still passes the residency test.  However, if he graduates in May, then takes a job and does not live with you for the rest of the year, he fails the residency test.

Support Test – The child cannot provide more than half of his or her own support for the year. The good thing about this one is that if your child received a scholarship, it does not count towards his contribution to his own support. However, if your child works it’s possible that he could fail the support test.  

Joint Return Test – Your child cannot file a joint return for the tax year.  The exception to the rule is if your child and his spouse file a joint return merely to claim a refund. In other words, they weren’t required to file a return, but they filed because they had a refund coming to them.

As I said, your child must pass all 5 tests to be claimed as a dependent by you. To make this article shorter, I did not discuss a qualifying relative.  If your child is not your qualifying child, he or she may be your qualifying relative. The rules for each are different, and should be investigated if necessary.

If you have a tax question, just click on the email link below or leave a comment.
Brycast Financial Planning in Austin Texas --- We Can Help
Income Tax Preparation in Austin Texas
contact: service@brycast.com http://www.brycast.com/
Enrolled Agent; Investment Advisor Representative