What an exciting time! Your child has just graduated high school and is off to college in a few weeks. Amidst all the preparations and celebrations, you might wonder about your tax situation: can you still claim your college-bound child as a dependent? The good news is, in many cases, the answer is yes! However, there are several factors outlined by the IRS that you need to consider.
To start, children under the age of 24 and enrolled as full-time students for at least five months of the year, can generally be claimed as dependents. Their school determines full-time status and the five months do not need to be consecutive. Additionally, your child must live with you for more than half the year. Fortunately, time spent at school counts as time spent at home for tax purposes.
You must provide more than half of their financial support, including tuition, room and board, books, and other educational expenses. Be mindful of scholarships and grants your child may receive, as these can affect the calculation of who provides the majority of support.
If your child is working, their earned income does not impact your ability to claim them as a dependent as long as they do not provide more than half of their own support.
The two credits that you could possibly claim are “The American Opportunity Tax Credit” (AOTC) and the “Lifetime Learning Credit “(LLC). Both of these credits can significantly reduce your tax liability.
Navigating these rules can be complex, but the potential tax savings make it worth ensuring you claim your eligible dependents correctly. A professional CPA can help you maximize tax benefits while supporting your family’s educational goals.