Can I Claim My Student as a Dependent?

student dependent claim on taxes

You worked hard to help your child get into college. Now there are tax credits, scholarships, and loan deductions that you haven’t had to deal with before. If this is your first time filing your taxes since your child went off to college, here are some of the questions you may be asking this tax season.  

Can I claim my student as a dependent? 

If your child 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.

Be aware that if your student meets any of the requirements below, they must file their own return. However, you may still be able to claim them as a dependent even if they file their own return.   

If your student is single, they are usually required to file a federal return if any of the following applies: 

  • They have earned income of more than $12,550  
  • They have unearned income from interest, dividends, or capital gains of more than $1,100  

If your student is married, they are usually required to file a federal return if any of the following applies: 

  • They have earned income of more than $12,550  
  • They have gross income of $5 or more and their spouse itemizes their deductions 
  • They have unearned income from interest, dividends, or capital gains of more than $1,100  

See IRS Publication 929 for more information on tax rules for children and dependents.

Should my dependent claim education credits?  

If you claim your college student as a dependent, you may be eligible for education tax credits like the American Opportunity Credit or the Lifetime Learning Credit. However, there are income thresholds for these benefits. If you exceed the income threshold, your child could still be eligible for the credit as long as you don’t claim them as your dependent.

If you have more than one child and they are only eligible for the Lifetime Learning Credit, it may be more beneficial if you don’t claim them as dependents. Learn more about how education tax credits work here 

What education-related tax forms will I receive?  

If you paid tuition or fees to the college or university for your student, they should receive an IRS Form 1098-T. It will show how much you paid or how much you were billed. It covers tuition, fees, and other expenses directly related to their courses. You can use it to calculate what tax benefits you’re eligible for if you were the one paying the fees. 

Note: You may also receive a Form 1098-E from your lender if you’re making student loan payments. Once you have this form you might be able to write some interest off as a tax deduction. Read more about the student loan interest deduction here.

Can I claim my student’s income on my tax return? 

If your student is required to file their own return, you can still claim them as a dependent, but you won’t be able to claim their income on your return.  

If your student made less than the standard deduction amount ($12,550 for 2021), they are not required to file their own tax return, and you do not have to claim their income as a parent.  

If your child’s only income is unearned income (from interest, dividends, or capital gain distributions), you may be able to include that income on your return. In that case, your child would not have to file their own tax return. 

Do I have to pay taxes on my child’s scholarship? 

It depends. Certain scholarships are tax-free. However, you must use the money to pay for qualified education expenses. Read more on how college scholarships affect taxes here.  

Are there any tax-free college savings plans? 

Yes. If your child is not in college yet or if you want to start thinking about saving for your next student, you may want to consider a 529 savings plan or a Coverdell college savings account. Both grow tax-free from both federal and state income tax. And funds that are withdrawn for education purposes are not taxable. 

The information in this article is current through tax year 2021 (taxes filed in 2022). 

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