Kiddie Tax Qualifications

[GeorgiaRe Tired]

I have a client that is 23 with unearned income and no earned income.  She made 30K earned the prior year, 2020, and filed/claimed herself (no kiddie tax).

For 2021, she did not have earned income, did not live at home, had 10K of unearned income, AND did not qualify as a full time student for more than 5 months.  The way I read it, being part time is enough to disqualify the kiddie tax, correct?

She took the following hours: Fall 10 hrs, Spring 14 hrs, Summer 4 hrs.  Spring was the only full time semester which is 4 months.

In addition, you could argue she paid half of her support, although, the math gets fuzzy. Attends a state school under scholarship (no tuition).  Only expenses are school fees and room/board.

Thanks in advance!

[TaxGuyBill]

---

@GeorgiaRe Tired wrote:

Spring was the only full time semester which is 4 months.

---

So it completely ended by April 30th?  If any of the semester went into May, that is 5 months which makes her a full-time student.

And she did not pay over 1/2 of her support with earned income.

[rbynaker]

Isn't it any part of 5 calendar months?  I haven't had to research it in a while.

When I was in school Spring was mid-January through early-May so that would be 5 months even if it was less than 150 days.  If the semester ended in April (or started in February) then you might only have 4 months.  But I think you're probably tripping over the 5 month rule, making them qualify as a full-time student.

Without earned income greater than half of their support I think you're caught in the kiddie tax trap.

Rick

Edit: What Bill said (sorry got called away while I was writing this!)

[TaxGuyBill]

---

@rbynaker wrote:

Edit: What Bill said (sorry got called away while I was writing this!)

---

I do that all of the time.  I open the window, and a half hour later I start responding and then I realize there have been a million other comments in the meanwhile.  😂

[rbynaker]

Hey, at least we got the same answer!

---

[abctax55]

(Bill, I'm so, so glad that never happens to ME 🙂

[GeorgiaRe Tired]

Spring Semester: First day of class 1/14/21-Final Exams 4/29/21.  

Technically, she did pay with earned income from the prior year.  She saved from coop in 2020 where she made $30K.

[rbynaker]

---

@GeorgiaRe Tired wrote:

Spring Semester: First day of class 1/14/21-Final Exams 4/29/21.  

---

Cha-ching!  Sounds like it might be a winner!