I am reading the language that I THINK is explaining which adult children qualify as dependents on their parent’s taxes. There is a Gross Income Test that reads: “To meet this test, a person’s gross income for the year must be less than $4,150.”:
The language says that scholarships/fellowships that are in excess of tuition,fees,books and equipment DO count in this income test.
This seems pretty remarkable - does this really mean that an adult child that is in college, receiving extra scholarship that exceeds $4150 is no longer MY dependent? That would have severe consequences for our family’s tax burden, WAY far in excess of the few extra dollars of scholarship.
If you pay for more than 1/2 of the support then they are still a dependent. But with the new tax law, you don’t get a dependency exemption anymore anyways (except for states - but not federal).
There IS an income limit when the child turns 24. It takes more than just providing half their support (I know because we’re in that situation this year - our son turns 24 but will still be a full-time college student).
The gross income test is one of the tests to determine if someone can be your qualifying relative. If the person you are concerned about is your child, use the tests for being a qualifying child, which are different than the tests to be a qualifying relative and do not include the gross income test.
Edited to add: I was assuming your child was under age 24 at the end of the tax year. If that’s not the case, disregard.
@3mamagirls Well, hope you are right!
Fortunately, either way, I miscalculated that “excess aid” number so it’s not an issue for us. Next time I will use a calculator.