College Student -- Junior

[T-Town-CPA]

I have a client that has a child enrolled in a university who completed his Junior year of college in 2019.  Parents want to claim him as a dependent to claim his college expense deduction on their return for 2019, but student (dependent) had an apartment for attending school and "did not" live with parents from August - December.

I'm having trouble seeing how they can claim him as a dependent since he no longer lives with them - he did Jan - July.  Even though he is a full time student.

If they give him up as a dependent, they can not claim the college credit for themselves.  Correct?

If the student is no longer a dependent, but the parents have paid his college expenses, can the son obtain the credit for himself as he is no longer a dependent on his parent's return?

Final complication.  Parents moved from Illinois to Indiana.  So part year resident too.

Thank you in advance for your thoughts.

Best,

Tom Tomlinson

[Just-Lisa-Now-]

Many college students dont live at home....Does he provide more than 50% of his own support?

You need to go back to basics  https://www.irs.gov/help/ita/whom-may-i-claim-as-a-dependent

[TaxGuyBill · Accepted solution]

January through July is over 6 months.  So unless the child paid for over 1/2 of his own annual support, the child is a dependent of the parents.

If it was less than 6 months, in most cases, going to college is considered a "temporary" absence and therefore considered as living with the parents.  But that is not always the case.

If the student established that he has PERMANENTLY moved out, then it would not be temporary.  For example, where does he live during the summer?  Does he still get mail at his parents?  What address is on his driver's license?  If the college is out of state, does the the college consider him a Resident?  What State considers him a Resident for taxes?

But again, because the student lived with the parent for over 6 months, that doesn't really matter in this case because the "residency test" for a Qualifying Child has been met.

[T-Town-CPA]

Thank you for your quick response.  No, he does not provide 50% of his own support if you include the cost of attending college.

[T-Town-CPA]

Thank you for your quick response.

"If the student established that he has PERMANENTLY moved out, then it would not be temporary.  For example, where does he live during the summer?  Does he still get mail at his parents?  What address is on his driver's license?  If the college is out of state, does the the college consider him a Resident?  What State considers him a Resident for taxes?"

He "probably" has permanently moved out.  During this summer he is staying in his apartment.  No, he doesn't get direct mail at the parent's home -- lots of mailing list mail.

Address is the state of Illinois -- former state of residence of parents and now his apartment state.

College considers him a resident of Illinois.  Taxes - this is the first year he would be a part year resident if still claimed by parents.  His only income was in Illinois

Thanks!

[BobKamman]

College students are temporarily absent from home.  I wonder if someone is trying to make the case here that he is not a dependent so that he gets $1,200 and the AOC credit when the parents' income is too high to qualify. 

Apparently he was living in the same house with his parents until they moved out of state.  To stay in school, he had to stay in town.  But if he had failed his exams in December, where would he be?  Living with his parents?  If classes went online in March and he lost his part-time job, where would he be?  Back home, right? Let's not try to reinvent the wheel.  

[T-Town-CPA]

Thank you for your response.  No, I don't think that is the case, although helpful for the student for sure.  The parents income is not too high for the AOC credit I just want to make sure I treat both parties correctly for tax purposes.

The student is a good student and final exams don't factor in at all.  Thanks for walking me off the cliff...

Have a great day!

[qbteachmt]

I don't see where you ever answered: does this student work and pay their rent, utilities, food, etc, with their own funds? Or, are the parents supporting the student while the student is living away from home?

[T-Town-CPA]

Sorry. Student is paying his own rent, utilities, food, etc. with his funds.