Tax, student aid and grant question

<p>My oldest son, his fiancee, her 3 year old daughter and their 10 month old daughter all live with me, my husband, our son and daughter. My oldest son works a full time job and is claiming their daughter on his taxes. His fiancee is a full time student, but is 23, got student loans and grants last year and claimed her daughter on her FAFSA. My husband and I do provide more than half the support for everyone in the household.</p>

<p>My question is, can we claim my oldest son fiancee and daughter on our taxes since we provide support for them? If we do claim them, what will it do to her FAFSA when she goes to file again? Will we need to provide her with our income information like I do with my children?</p>

<p>Any help will be greatly appreciated! Thank you!!</p>

<p>Rita
~~~~~~~~~</p>

<p>Look at IRS pub 501, the part about exemptions for dependents.</p>

<p><a href=“http://www.irs.gov/pub/irs-pdf/p501.pdf[/url]”>http://www.irs.gov/pub/irs-pdf/p501.pdf&lt;/a&gt;&lt;/p&gt;

<p>How old is your son? They would have to qualify as qualifying relatives, not a qualifying child. They would have to satisfy all the tests for that and most likely they can’t meet the gross income test.</p>

<p>Being a dependent for taxes has nothing to do with being dependent/independent for finaid. Having dependents of her own, she should already be and would remain independent for federal finaid.</p>

<p>The mother would only be independent if the daughter actually were dependent on her (if she provided >50% support)</p>

<p>So you want to claim your son, his girlfriend and her child, all as dependents on your tax return. Then your son would lose his personal exemption and could not declare the child as his dependent, right? I also question whether she could then claim herself independent since she is not age 24, and if the child is your dependent, not hers, it doesn’t qualify her strictly speaking, as independent. The other dicey part is that if you are indeed providing more than half of her support, that should be reported on her financial aid statement (FAFSA) which would. If this woman is getting loans and grants from the government, I’m not sure how that figures in what her income is and what your figures need to be for support.</p>

<p>The fact of the matter is that a lot of schools turn their heads to these things. But when you ask here onj this forum, a lot of the technicalities come up. I’m not a tax expert so I don’t know how all of this will play out. There are tax credits for the young woman’s college costs if she is getting some of the aid through loans. Also if she has any income whatsoever, the Earned Income Credit may come into play. What the legal, appropriate and best way to for who to claim whom in this situation is something a tax expert should advise. Earnings amounts and what the support numbers are as well as financial aid all comes into the picture as well.</p>

<p>My son is 24, we are not claiming him. He is filing taxes and claiming their daughter but claiming his fiancee and her daughter too will only get him a little over $100 more back. </p>

<p>My son’s fiancee does meet the gross income test since she was a full time student all last year and did not work.</p>

<p>The next time she files for FAFSA, she will be 24 and she is already considered a single mother. So claiming her as a dependent on our taxes will not change her grants or scholarships? And she won’t need to have our income on her FAFSA when she files this year?</p>