As a college student, you may find yourself wondering, "how do I coordinate with my parents when I'm preparing my taxes?" Now is a good time to have a conversation! First, ask if they plan to claim you as a dependent. You need to know this before you file your taxes.
Families may want to claim their college student as a dependent because of the Earned Income Credit, as well as education-related credits. Read this news release from the IRS to help you think about what you and your parents may want to discuss.
Rules for Claiming a College Student for EITC
Many families with children in college wonder if they can claim the Earned Income Tax Credit (EITC). The answer depends on several factors, including the student’s age, income, and dependency status.
Do I qualify?
To qualify as a qualifying child for EITC, a college student must:
Be under age 24 at the end of the tax year and a full-time student for at least five months of the year:
- Have lived with the taxpayer for more than half the year*
- Not have provided more than half of their own financial support.
Do I need to live at home?
Many college students live away from home for most of the year while attending school, which may raise questions about the residency requirement. However, time spent away for educational purposes is considered a “temporary absence” under IRS rules. As long as the student would normally live with the taxpayer when not in school, their time away at college still counts toward the requirement that they live with the taxpayer for more than half of the year.
Should I send my parents my Form 1098-T?
Additionally, if the parent is claiming their child based on their status as a full-time college student, they will likely be eligible for education credits, and need their child’s Form 1098-T, Tuition Statement. Many schools now provide this form electronically rather than mailing a paper copy, so the student will likely need to log into their school’s online portal to retrieve it. Parents should remind their student to check for this form to ensure they have all the necessary documents for filing.
If the student files their own tax return and earns low wages, they may qualify for the EITC independently. However, they cannot claim the EITC if they are claimed as a dependent by someone else.
Source: Internal Revenue Service (IRS)
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