Is it beneficial to me to not have my parents claim me on their taxes anymore. i am 19 and a full time college student. they don't get the child tax credit anymore (2024)

FAQs

Should I claim my 19 year old college student as a dependent? ›

However, to claim a college student as a dependent on your taxes, the Internal Revenue Service has determined that the qualifying child or qualifying relative must: Be younger than the taxpayer (or spouse if MFJ) and: Be under age 19, Under age 24 and a full-time student for at least five months of the year.

The IRS defines a dependent as a qualifying child (under age 19 or under 24 if a full-time student, or any age if permanently and totally disabled) or a qualifying relative. A qualifying dependent cannot provide more than half of their own annual support.

To meet the qualifying child test, your child must be younger than you or your spouse if filing jointly and either younger than 19 years old or be a "student" younger than 24 years old as of the end of the calendar year.

Even if a parent or guardian claims you as a dependent, you will still have to file a return if your gross income is over the annual threshold. You can always work with a Tax Pro to sort out what the best way ahead may be for you.

Cons of claiming your parents as dependents

While tax credits and deductions can help you reduce your taxable income, you still have to pay a significant amount in care costs. The tax benefits you receive from claiming your parents as dependents will only partially offset medical expenses and other care costs.

If you claim a dependent, only you can claim the education credit. Therefore, you would enter Form 1098-T and the dependent's other education information in your return. If you do not claim a dependent, the student can claim the education credit.

“If my parents claim me, do I lose money?” If a parent claims you as a dependent on their taxes, while they gain the ability to claim certain tax benefits associated with having a dependent, generally the dependent won't lose out on money directly.

Here's the short answer: The Internal Revenue Service (IRS) will usually let you claim your child if they work or earn an income, no matter the dependent's income source, if certain requirements are met.

Gross income is the total of your unearned and earned income. If your gross income was $4,700 or more, you usually can't be claimed as a dependent unless you are a qualifying child. For details, see Dependents.

The Child Tax Credit is one pro of claiming your child as a dependent. It's a tax benefit that every American taxpayer can claim for every qualifying dependent child they have. It was designed to help working families by directly decreasing the tax liability of the taxpayers in the family.

Can I claim my 40 year old son as a dependent? ›

It's possible, but once you're over age 24, you can no longer be claimed as a qualifying child. The only exception to this is if you're permanently and totally disabled. However, you can be claimed as a qualifying relative if you meet these requirements: Your gross income is less than $4,700.

For tax years after 2018, claiming dependents no longer provides for an exemption of any income from taxation. However, each dependent that qualifies for the child tax credit will reduce your taxes by $2,000 and those that don't, can reduce your taxes by $500 each.

If your parents meet eligibility criteria to claim you as financially dependent for tax purposes, it is usually more beneficial for them to do so rather than you claiming a deduction for yourself. Parents typically have a higher income since they are older and more established in their careers.

If a Student's Parents Do Not Claim Them as a Dependent on their Income Tax Returns, Will the Student Get More Financial Aid? Whether or not a student is claimed as an exemption on his parents' federal income tax returns has no impact on the student's eligibility for financial aid and scholarships.

If your income is high enough to lose out on the dependent exemption for a child attending college, your family may benefit from opting not to claim your college student as a dependent. By this point, your child is over the age of 17, so the child tax credit is not available.

For qualifying dependents who are not a qualifying child (called “qualifying relatives” in tax law), the person's gross income for the 2023 tax year must be below $4,700 (for 2023). For qualifying relatives, they must get more than half of their financial support from you.

You can claim a tax credit for your college tuition, or your dependent child's college tuition, either through the American Opportunity Tax Credit (AOTC) or the Lifetime Learning Credit (LLC).

Key Takeaways. A minor who may be claimed as a dependent needs to file a return if their income exceeds their standard deduction. A minor who earns less than $13,850 in 2023 will usually not owe taxes but may choose to file a return to receive a refund of tax withheld from their earnings.

The Lifetime Learning Credit (LLC) allows students or parents to claim a credit of up to $2,000 for qualified education expenses. There is no limit on the number of years this credit can be claimed, but you can only claim this or the American Opportunity Credit.