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Dependents from a Tax Perspective: What is “Total Support”?

Posted Jun 03, 2015

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Is your child a student under the age of 24? Does your child not live at home? You may still be able to claim him or her as a dependent if you provided over one-half of their total support in a given year.

The following items are included in total support:

  • Food, clothing, and recreation.
  • Amounts received under the GI Bill for tuition payments and allowances.
  • Medical insurance premiums and medical and dental care.
  • Lodging (if providing lodging rent free, the fair market value of rent).
  • Capital items (furniture, appliances, and cars) purchased.
  • Transportation
  • Similar necessities

The following items are not included in total support:

  • Federal, state, and local income taxes paid by persons from their own income.
  • Social security and Medicare taxes paid by persons from their own income.
  • Life insurance premiums.
  • Funeral expenses.
  • Scholarships received by your child if your child is a student (taxable scholarships are included in the child’s gross income and considered earned income).
  • Survivors’ and Dependents’ Educational Assistance payments used for the support of the child who receives them.

A person’s own funds are not support unless actually spent for support. In the case of your student child, this may apply to income received, amounts borrowed, and amounts in savings and other accounts. If these amounts were not spent on their support, they do not count toward the one-half total support test.

Example – Your child, a full-time student under the age of 24, lives away from home. He has a part-time job and received taxable income of $10,000. Of the $10,000, let’s assume that $8,000 was placed into a savings account and $2,000 was used for his support. You may be able to claim your child as long as you spent more than $2,000 for his total support.

See worksheet 2 on page 16 of the IRS’s Publication 501 ‘Exemptions, Standard Deduction, and Filing Information’ to assist you with determining who has provided over one-half of the student’s total support.

For other scenarios, see this IRS tool to help determine if you may claim someone as a dependent.

Sources:

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As a general disclaimer, the information provided above is very general and broad in nature, is not represented as complete, and may not apply to taxpayers’ individual situations. We advise all taxpayers to consult a professional tax advisor regarding their own specific tax needs. 





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