Claiming 18 year old students/taxes

[hippymamato3]

If you are NOT eligible (as parents) for any stimulus, etc. is there any reason to claim your 18 year old who enters college in the fall? I've read a bunch of articles and I think it makes sense for us NOT to, but just wanted to check. 

[EKS]

Do you mean claim them as a dependent?  I did with my older son until the year he became self supporting (age 22).  I'm still claiming the younger one.

[Storygirl]

We get more money back for the child deduction than she would get if she filed independently. DD19 does file her own taxes, as well, but marks that she is a dependent.

[Pawz4me]

I think it's always beneficial to claim as many dependents as you can. We claimed both of ours until they graduated from college and had full time jobs.

[TexasProud]

6 minutes ago, Pawz4me said:

I think it's always beneficial to claim as many dependents as you can. We claimed both of ours until they graduated from college and had full time jobs.

Um, no it is not. We have gotten no benefit from claiming a dependent. They all file on their own now. 

[Halftime Hope]

Yes, we found that there was a lot of benefit to claim them as dependents for as long as possible.   (3 kids, 4 years of college each) 

Often times students have much lower income and the $ for $ benefit to the entire family is far less to them than if they are claimed on their parents' income taxes.  We ran our taxes both ways, and then we chose to claim them as dependents, and give our kids the difference between what it would have been filed on ours vs. theirs.  

Edited to add: 

We could no longer claim a child credit after they aged out at 17, but we could claim them as dependents.  What was beneficial was the tax credits for college expenses.  Our kids were all required to file their own tax return once they were employed (that ranged from 14-16 yo), but we still we claimed them as dependents on our return, based on the tax code rules.  Be sure you read up on and understand the current rules for college expense write-offs.  When our kids were in school, you could only claim 4 years of tax credits, but that would span 5 calendar years of taxes.  We ended up needing to pay quite a bit of one dependent's senior year spring tuition before Dec 31 so we would receive full tax credit for it.  That was a unwelcome surprise, although we were still grateful we could take advantage of the credit.)  Rules change, so be sure to look ahead to map your strategy. 

 

 

Edited March 27, 2021 by Halftime Hope

[Tap]

We claimed them until it made financial sense for them to claim themselves. We paid for our children's expenses through college, so we took the tax benefit until they were independent. 

[SDMomof3]

We have been claiming our two college kids as dependent, until this year. It was much more beneficial for them to file their own taxes this year, because they will get the money from the first and second stimulus. They were left out originally because the were adult dependents. 

[hippymamato3]

15 minutes ago, SDMomof3 said:

We have been claiming our two college kids as dependent, until this year. It was much more beneficial for them to file their own taxes this year, because they will get the money from the first and second stimulus. They were left out originally because the were adult dependents. 

This is what I'm thinking we will do. 

[BlsdMama]

We run THEIR taxes as both an independent and a dependent. We calculate OURS both claiming them and not. Then we do what benefits best. We claimed our 21yo and our 19yo this year - so their FAFSA shows three of our kids in college. We benefited - but the 21yo lost a big refund, so we end up giving him the difference. 
 

However, I’ll add that because of family size vs. income, DS should have been eligible for a Pell. Because he was dependent AND he made $20k+, that income is considered discretionary. He lost that Pell completely. It wold have been better if he has been independent this year. We just assumed his income was irrelevant if he was considered a dependent and our EFC was so low!!

 

Lots to consider....

[TexasProud]

1 hour ago, BlsdMama said:

We run THEIR taxes as both an independent and a dependent. We calculate OURS both claiming them and not. Then we do what benefits best. We claimed our 21yo and our 19yo this year - so their FAFSA shows three of our kids in college. We benefited - but the 21yo lost a big refund, so we end up giving him the difference. 
 

However, I’ll add that because of family size vs. income, DS should have been eligible for a Pell. Because he was dependent AND he made $20k+, that income is considered discretionary. He lost that Pell completely. It wold have been better if he has been independent this year. We just assumed his income was irrelevant if he was considered a dependent and our EFC was so low!!

 

Lots to consider....

Yes, absolutely prudent to run it both ways.  I just disagreed with the poster who said it is always good to claim them.  

 

[Halftime Hope]

4 hours ago, TexasProud said:

Yes, absolutely prudent to run it both ways.  I just disagreed with the poster who said it is always good to claim them.  

 

I think that is the best course of action after reading some of the other stories here.  Each family has circumstances that make it different for them, and there is no universal answer that applies to each family.  And tax codes change. As do stimulus checks...who would have guessed that five years ago. 

[RootAnn]

It would benefit dd#1 to be independent this year because of the stimulus payments. We can't claim any of her college expenses because she's on a full ride scholarship (which means she pays taxes on the parts that are taxable like room & board) and any extras that aren't covered (like last summer's online tuition) are paid for by her 529. It makes zero sense for us to claim her as a dependent tax-wise, but we will do what we legally must. If we pay too much of her expenses for her to be considered independent, we ethically have to claim her as a dependent even if we wish it were otherwise.

[Pippen]

You really do have to run the numbers. We thought we'd be claiming youngest in her last year of college, but in the end we couldn't. She should gain the $1800 stimulus, but we lost her as a dependent and also lost her tuition tax credit. She hasn't done her taxes yet,  but likely she won't get tuition credit either, because she won't owe on her federal. 

I just did our taxes and it isn't pretty. We lost two dependents, and tuition tax credits from both.