How much money can a college student make and still be claimed as a dependent?

Student income is not considered when determining if you claim your college student as a dependent. The key factor is who is paying for the majority of a student's living expenses, including their tuition, housing, food, transportation, and clothing costs. A working college student can still file their own tax return, even if someone else is claiming them as a dependent; it just needs to be noted on their application. Many parents still play a significant role in paying for college, some even going into debt to cover tuition. Claiming a dependent can offer thousands of dollars in tax credits each year.

Do college students get $1000 back on taxes?

Some college students may qualify for a $1,000 tax refund, but it is not a guarantee. The AOTC offsets the educational expenses of tax filers for the first four years of higher education. A maximum credit of $2,500 is allowed. If you owe no tax, you could be eligible for a 40%, or $1,000, refund. However, the credit is subject to income limitations, and a student must have paid qualified higher education expenses. They also can't have a felony drug conviction at the end of the tax year. Additionally, refundability depends on if the student is claimable on someone else's tax return.

Do college students get higher tax refunds?

College students can be eligible for significant tax credits and benefits depending on their situation and how they file for taxes. Both the AOTC and LLC are available to eligible students or their parents. If a student is filing taxes independently because they pay more than half of their living expenses, they could also qualify for the Earned Income Tax Credit. This benefit is offered to workers who earn less than $63,400 per year. College students with children could also be eligible for the Child Tax Credit, another $2,000.

When should you stop claiming your child as a dependent?

You must stop claiming your college student as a dependent once they are 24 years old or older, or if they start filing their own taxes jointly with a spouse. Also, if your college student is over the age of 18 and paying more than 50% of their living expenses, including food, shelter, housing, transportation, and tuition, you are not allowed to claim them as a dependent.

Should I Claim My College Student as a Dependent?

Updated on October 10, 2024

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How and when to claim your college student as a dependent is a decision many parents face during tax season. Read our guide to understand the benefits.

One of the biggest questions parents have after sending their child off to college is whether they can still claim their child as a dependent for tax purposes.

In a nutshell, you can usually claim your college student as a dependent on your taxes if they’re a full-time student who meets some specific IRS guidelines. Please keep in mind that this is different from claiming your child as a dependent for financial aid.

Before going to college, your child likely lived at home, depleted the food in your refrigerator, and constantly asked you for gas money. It only made sense, then, that they were considered your dependent when tax season rolled around.

But now that your child is in college and living away from home for a good part of the year, can you still claim them as a dependent on your taxes? The answer is yes — as long as they meet certain criteria. But is it the best idea financially? Read on to find out.

IRS Rules for Claiming a College Student as a Dependent

Only one person or a pair of spouses filing jointly may claim a student as a dependent.

Even if your student files their own tax return for part-time wages, as long as they are under 24 years old and enrolled in school full-time, you may still be able to claim them as a qualifying child. Here are some qualifications as defined by the IRS.

Can You Claim Your College Student as a Dependent?

Yes

Student is 18 years old or younger
Student is between 19 and 24 years old and enrolled in school full-time
You provide more than 50% of your student’s financial needs, including if you have taken out any loans (not your student)
Student has lived with you for more than half the year
Student is a U.S. citizen

No

Student is 24 years old or older
Student is filing a joint return with a spouse
Student is over 18 and only pursuing part-time studies
Student is claiming independent tax status themselves
Student is paying more than 50% of their living expenses

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). The student loan interest deduction is also a benefit on any loans you have taken or cosigned for your child.

Altogether, these tax programs have the potential to save you thousands of dollars, which can, in turn, help pay for your child’s education. It’s important to consider income eligibility.

The AOTC, for example, offers a maximum annual credit of $2,500 per eligible student for the first four years of their higher education. If no tax is owed, the student, or whoever is claiming them, can be eligible for a 40%, or $1,000, refund.

To claim the full benefit, however, your modified adjusted gross income must be $80,000 or less for a single taxpayer or $160,000 or less for a married couple filing jointly. A reduced credit is available to single taxpayers earning between $80,000 and $90,000 a year or $160,000 to $180,000 for married couples.

The LLC, which is a $2,000 tax credit that can be claimed during and beyond the first four years of higher education, has similar income limitations. Unlike the AOTC, however, it is not refundable, meaning if no tax is owed, you don’t get any money back. The IRS offers this chart comparing the two credits.

In some instances, a parent’s earned income may be too high to qualify for educational tax credits, but a child might be eligible. Your college student can file independently if they are providing for more than 50% of their own living expenses, including tuition, housing, utilities, food, transportation, clothing, and medical and dental care.

Independent filers could qualify for other tax programs, such as the Earned Income Tax Credit and The Child Tax Credit, depending on their situation. It’s important to consult a tax professional to explore your options.

Typically, however, parents are likely to receive a greater benefit than the student. The IRS offers a 15-minute online test you can use to help determine whom you can legally claim on your tax return.

Frequently Asked Questions About Claiming a Dependent Student on Taxes

College students who are funding more than half of their living expenses could see a financial benefit from filing independently.

To file as an independent, however, a college student must provide for more than half of their financial needs. This includes housing, tuition, food, clothing, transportation, and more.

DISCLAIMER: The information provided on this website does not, and is not intended to, constitute professional financial advice; instead, all information, content, and materials available on this site are for general informational purposes only. Readers of this website should contact a professional advisor before making decisions about financial issues.