Is it better to claim a college student as dependent?
Asked by: Prof. Lane Hintz PhD | Last update: December 16, 2025Score: 4.5/5 (50 votes)
Is it better not to claim my college student as a dependent?
Claiming your college student as a dependent on your tax return means potential tax savings! On the other hand, it could mean adjustments (including penalties and interest) if you claim them when you shouldn't.
How much do parents get for claiming a college student?
How much tax credit do you get as a parent for a college student? If your child is classified as a dependent student, you can claim the full AOTC or LLC tax credit. That is, up to $2,500 for the AOTC or $2,000 for the LLC per year.
When should you stop claiming a child as a dependent?
To meet the qualifying child test, your child must be younger than you or your spouse if filing jointly and either younger than 19 years old or be a "student" younger than 24 years old as of the end of the calendar year.
What are the benefits of claiming a college student on taxes?
The Lifetime Learning Credit (LLC) allows students or parents to claim a credit of up to $2,000 for qualified education expenses. There is no limit on the number of years this credit can be claimed, but you can only claim this or the American Opportunity Credit.
Claiming College Students as Dependents - Requirements, Taxes, Pros and Cons
Should I claim my 20 year old college student as a dependent?
However, to claim a college student as a dependent on your taxes, the Internal Revenue Service has determined that the qualifying child or qualifying relative must: Be younger than the taxpayer (or spouse if MFJ) and: Be under age 19, Under age 24 and a full-time student for at least five months of the year.
Do college students get more tax refund?
The AOTC is a tax credit worth up to $2,500 per year for an eligible college student. It is refundable up to $1,000. To qualify for the AOTC, students must be enrolled at least half-time in an eligible degree or certificate program at a qualified institution.
Can I claim my daughter as a dependent if she made over $4000?
While the income source doesn't matter, there are other income considerations. For qualifying dependents who are not a qualifying child (called “qualifying relatives” in tax law), the person's gross income for the 2023 tax year must be below $4,700 (for 2023).
What is the $3600 child tax credit?
Specifically, the Child Tax Credit was revised in the following ways for 2021: The credit amount was increased for 2021. The American Rescue Plan increased the amount of the Child Tax Credit from $2,000 to $3,600 for qualifying children under age 6, and $3,000 for other qualifying children under age 18.
Should I claim my 19 year old as a dependent?
You generally may do so as long as your child is either under age 19 (nonstudents) or under age 24 (students). But there is a reason to not claim your child as a dependent – and it has everything to do with higher education.
How to get the full $2500 American Opportunity Credit?
To claim the full credit, your modified adjusted gross income (MAGI) must be $80,000 or less ($160,000 or less for married filing jointly). You receive a reduced amount of the credit if your MAGI is over $80,000 but less than $90,000 (over $160,000 but less than $180,000 for married filing jointly).
Can I claim my daughter's college tuition on my taxes?
The American Opportunity Tax Credit
You can claim the AOTC for a credit up to $2,500 if: Your student is in their first four years of college. Your income doesn't exceed $160,000 if you are married filing a joint return. Your income doesn't exceed $80,000 as a single taxpayer.
Should my college student file his own taxes?
Do students have to file a tax return? College students must file a tax return if they made over a certain income. That income threshold depends on multiple factors, including if you are a dependent or married. Generally, if you're a single student who made more than $12,950, you will have to file a tax return.
Why do parents claim college students as dependents?
Pros and Cons of Claiming Your College Student as Dependent on Taxes. The ability to claim a college student as a dependent generally makes taxpayers eligible for more credits and deductions, such as the American Opportunity Tax Credit (AOTC) and the Lifetime Learning Credit (LLC).
Is it better for a college student to file independent or dependent?
Typically, independent students tend to receive more funding from the FAFSA than dependent students. This is primarily because the SAI for independent students is often lower, as it does not take into account their parents' income and assets.
When can I no longer claim my college student as a dependent?
Rules for claiming college students as dependents
If your child meets these requirements and is a full-time college student, you can claim them as a dependent until they are 24. If they are working while in school, you must still provide more than half of their financial support to claim them.
When should I stop claiming my child as a dependent?
Make sure your dependent meets the IRS requirements. Generally, the IRS requires that the child is under the age of 19 (or under 24 if a full-time student), lives with you for more than half the year, and does not provide more than half of their own financial support.
Why am I only getting $2000 for Child Tax Credit?
Eligibility depends on filing status, income and the child's relationship to the caregiver. The maximum credit amount is $2,000, but it phases out based on modified adjusted gross income (MAGI) levels. This means high earners may receive a smaller credit or be ineligible.
Can I claim my 25 year old son as a dependent?
It's possible, but once you're over age 24, you can no longer be claimed as a qualifying child. The only exception to this is if you're permanently and totally disabled.
How much can a college student make and still be claimed as a dependent?
There is NO income limits for a college student to qualify as a dependent on their parent's tax return. The student could earn a million dollars, and still qualify to be claimed as a dependent on their parent's tax return.
Can I still claim my daughter as a dependent if she works?
You can claim a child who works as a dependent if they still meet the requirements to be a qualifying child – including the age, relationship, residency, and support tests.
Is it better not to claim a child as a dependent?
There are clearly more benefits than drawbacks to claiming your child as a dependent, but one clear situation in which you will not want to do so is if your income is high enough that you can't qualify for the education credits your college student dependent would allow you to qualify for.
Are there tax breaks for college students?
Tax Credits for Higher Education Expenses
The Lifetime Learning Credit allows you to claim up to $2,000 per student per year for any college or career school tuition and fees, as well as for books, supplies, and equipment that were required for the course and had to be purchased from the school.
Why do college students get a refund?
Scholarships, grants, and loans usually disburse directly to your college to cover billed expenses. If the financial aid exceeds these costs, a refund is generated. This refund can be sent to the student or, in the case of Federal Parent PLUS Loans, sometimes to the parent, depending on the school's policies.
Do I get money back from 1098-T?
The 1098-T form isn't just about reminding you how much you paid for that Organic Chemistry class you barely survived. It's also your ticket to potential tax breaks and deductions. There are a couple to consider: The American Opportunity Tax Credit can be worth up to $2,500 for each eligible student.