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February 12, 2021
Question

My daughter graduated on May 9th

  • February 12, 2021
  • 1 reply
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Hi

My daughter graduated on May 9th 2020. Then on June15th she started a new job.  Can we claim her as a dependent full-time student?

I hear about 5-month rule, but still not clear.

 

Thank you in advance.

    1 reply

    Hal_Al
    Employee
    February 12, 2021

    If he/she was a full time student (under 24) for parts of at least 5 months  (the five month rule) and lived with you for more than half the year (if she also moved out on June 15, you can't claim her), and did not provide more than 1/2 his own support for the whole year, you can still claim him. Be sure he knows you're claiming him, so he doesn't claim himself. He can only be claimed once. But, he can "file taxes" without claiming his own exemption.

    The real question is who should be claiming him in this "transition" year to adulthood. You two have to agree on who is going to claim his exemption. Each should do their taxes both ways and see which way the family comes out best.  Even then, you have to meet the rules. The rule is that a child of a taxpayer can still be a “Qualifying Child” dependent, regardless of  his income, if:

    1. he is a full time student under 24 for at least 5 calendar months of the year (graduating in May usually means you meet the 5 month rule)
    2. he did not provide more than 1/2 his own support  (scholarships are considered 3rd party support and not support provided by the student). 
    3. lived with the parent (including time away at school) for more than half the year

     

    So, it usually hinges on  "Did he provide more than 1/2 his own support in 2020.

    The support value of the home you provided is the fair market rental value of the home plus utilities & other expenses divided by the number of occupants. IRS Publication 501 on page 20 has a worksheet that can be used to help with the support calculation. See: http://www.irs.gov/pub/irs-pdf/p501.pdf