While working on my income tax filing, I found out that I cannot claim my oldest college son as a dependent because he made (in his part-time jobs) about $6K, which is about $2K more than what’s required to be dependent. My questions are: 1) is he required to file an income tax return, and 2) if not, is it worth it?
You can still claim him as a dependent if he is a student and you provide support. Reread the definition of a dependent child. Yes, he probably should file a tax return. One, it is easier to file for FA in future years because he can use the DRT and two, he might have paid in some taxes (state or federal) and will get a refund. I think the standard deduction (which he would get) is $6400, so if he made under that he doesn’t HAVE to file, but it may benefit him.
Thanks, very helpful @twoinanddone
I was using and going by what Turbo Tax software was leading me to. I’ll have to return to that section and read the instruction more carefully.
Support includes expenses you provided him during the year such as the value of his share of housing expenses/utilities, food, health insurance premiums/co-pays, transportation, clothing – any expenditures that covered typical costs of living. Of course add in any educational expenses.
Thanks, and I did all such support. @MinnesotaDadof3
My D earned $5,000 but didn’t spend that on her support. It is her discretionary money.
She has grants and scholarships for school which don’t count towards support.
We provide most of her support, health insurance, food, college fees and books, clothing.
She paid part of housing with her student loan, and we paid the rest.
In Publication 17 I think there is a support test worksheet you can use.
Also TurboTax should be free for your son since he should be able to file a 1040 EZ.
Thanks, @mommdc that’s good to know.
My D made around $10k last summer and I have not checked it in the tax software yet. Her tuition is fully covered by school. So I am not sure if I can still claim to support her more than 50%. Anyway, this would be the last year if I can claim her as dependent.
Actually TT is free for all, using any forms, who make less than $33k a year. Some other ones are free with incomes up to $66k - https://apps.irs.gov/app/freeFile/jsp/index.jsp
Some software comes with multiple free Federal e-filing. If you got one for yourself, your kids tax would be free anyway unless you have more than 5 submissions. I got the H&R Deluxe Fed and State with 5 Fed e-filing for just $10.
@tiggerdad we ran into the same dependent issue with TurboTax. We guesstimated DD’s income as > 4,050 when it originally asked us and it declared her not a dependent. When we revised to the actual number (luckily <4050) it made her a dependent again.
Its confusing as TurboTax themselves says the $4050 thing only comes into play for a dependent relative, not for dependent children:
The $4,500 income threshold (“Gross Income Test”) is only part of the “Qualifying Relative” test; it does not apply to the “Qualifying Child” test for tax dependency. Surprise, surprise; sometimes the tax software can be wrong.
Thank you all for your input. Always learn something new. 
For a number of years, TurboTax applied the tax credits in the wrong order, so credits that could be carried over were ‘used up’ first. I would redo the forms by hand to get my credits. I question how the AOTC was applied for the last few years on mine, but not enough of a worry to find a different way to do taxes and the calculations by hand…
My daughter is a full time student. She so happened to work for the school as an RA. They only took $ 3.15 out for federal income taxes. On top of that my daughter had scholarships worth more than her qualified expenses, and a work study stipend that also wasn’t taxed.
It looks like we are still required to claim her. Problem comes in when I am doing her taxes (turbo tax), she has to file form 8615. She may have to file at the alternative tax rate…27% or 28% respectively. That is A LOT when based on 10,000. of unearned income. I tried to claim her scholar ship amount on my taxes to no avail. UGGH, anyone have any insight into what I might do? She can’t afford to pay $2,700. in taxes.
@4Rbt4Rbt What were her total scholarships for 2017, and how much her qualified education expenses for 2017?
The work study income should have been on a W2. Was is a federal work study job on campus during the semester, or a summer research activity for which she received a stipend?
Also is the school paying her a salary for being a RA?
So between her scholarships, RA job and work study, she has all school expenses covered, and you didn’t have to pay anything?
Can you help her pay the taxes?
The amount of federal income tax withheld is based on the W-4 that your daughter completed. How much to withhold is up to the employee, not the employer.
You are not “required” to claim her as a dependent. If you don’t want to claim her, than don’t claim her, and give up the exemption. But, if you can claim her as a dependent and choose not to, she can’t get an exemption for herself.
Right; it’s her scholarship, not yours. Just like you can’t report on your tax return income that she might have earned.
The ‘alternative rate’ of 27% is YOUR rate? If she has to pay taxes on the scholarships, she’d have to pay it at your rate on that portion of her income. On the earned income portion (from her jobs), she’d pay at her rate.
Did the school issue a W2 for the work study or a 1099 for the RA job? Is the RA room and board considered income? It usually is not, it is an employer benefit because she is required to live on campus as a condition of her job.
Use a tax program like TurboTax. It will walk you through where and when to enter all information.