529 distribution used for tuition from a relative's 529

Forum|Forum|4 years ago
April 5, 2022
2 replies
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My son's tuition has been paid for by a 529 established by my Aunt (I am very fortunate in that respect). He also has earned income and unearned income (Dividends and capital gains) . Questions: 1) Are the 529 distributions included in his support? 2) If so, are they included in my support of him (I suspect not). If the answer to one is no, then no one has contributed more than half of his support. Seems to be the worst of all worlds......

RobertB4444

@wayward_son He is still your dependent. Go ahead and enter him as such on your return.

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Hal_Al

Employee

There are two types of dependents, "Qualifying Children"(QC) and Other ("Qualifying Relative" in IRS parlance even though they don't have to actually be related). There is no income limit for a QC but there is an age limit, student status, a relationship test and residence test. .

The support test is different for each type. The support test, for a QC, is only that the child didn't provide more than half his own support. The support test for a Qualifying Relative is that the taxpayer provided more than half the relative's support.

To answer your questions:

Q 1) Are the 529 distributions included in his support?

A 1) Yes

Q 2) If so, are they included in my support of him?

A 2) No. But they are also not him supporting himself, even if the distribution was sent to him (he was the "recipient"). So, he didn't provide more than half his own support, so he's still your dependent.