We see it every year. Parents come in to get their taxes done and claim their college student(s) as dependents, only to find that their child has already filed their taxes and accidentally claimed themselves. These young adults might be trying to do the right thing by getting their taxes done early and filed properly, but this little mistake can cost their parents thousands in additional taxes.
In general, you can claim any relative as a dependent if you pay for more than 50% of their support and their gross yearly income is less than $4,200. Most parents of college students are able to claim them as a dependent and are eligible to claim the educational tax credits for the students. It is important to note that the dependency exemption is not exchangeable. If a child qualifies as a dependent on the parent’s ( or someone else) tax return they cannot claim their own personal exemption even if the parents choose not to claim the child.
Qualifications for dependency:
- At the end of the filing year, your child is younger than 19 or, if a full-time student, younger than 24 and younger than you (or your spouse if you are filing a joint return). If your child is permanently and totally disabled, there is no age limit.
- The child was a US citizen US resident alien, US National or a resident of Canada or Mexico, for some part of the year.
- The child has the same main home as you (or your spouse if filing a joint return) in the United States for more than half of the tax year.
- 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).
To learn more about how to determine whether you can claim someone as a dependent, check out our blog post.
Remember, you can’t claim anyone who takes a personal exemption for themselves or claims a dependent on their own tax return. If you and your spouse are filing separately, only one of you will be able to claim a qualifying child to receive the tax benefits. To avoid confusion, it’s a good idea to get your taxes done before your student dependents. This way, even if they mistakenly try to claim their personal exemption on their own taxes, they won’t be able to. Of course, educating your children on how to file themselves is always a good idea, but this little trick will help cover your bases.
For more helpful tax tips and information check back with us every Thursday throughout tax season! We’ll be posting more info, and as always our Peoples Tax professionals are here to help. Give us a call today at (804) 204-1040 or email us to schedule an appointment! We are available in person in our RVA tax prep offices, or you can meet with one of our RVA tax pros virtually!