Most of us don’t worry about filing taxes before we turn 19 because our parents provide for us. Things start to change once you enroll in a college or start your first job, but your parents can still claim you on their taxes if you meet the requirements of a qualifying child.
Everyone’s situation is different, so whether your parents can claim you as a dependent on their tax return depends on the context.
Being claimed by your parents on their taxes can become an issue if you have a part-time or full-time job and must file taxes like everyone else.
In this article, we’ll show you what to do if your parents claimed you on their taxes to avoid having your tax return rejected by the IRS.
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The IRS Guidelines For Claiming Dependents
Your parents cannot claim you as dependent on their tax return after you turn 19 unless you meet specific criteria. However, you can claim yourself as a dependent by opting to use the personal exemption.
Tax Cuts and Job Acts (TJCA) reduced the personal exemption amount to zero from 2018 until 2025, so you have nothing to gain from using this exemption.
Your parents, on the other hand, could be eligible for several tax credits if you still meet the qualifying child or qualifying relative requirements.
Qualifying Child Requirements
According to the IRS Publication 501, you must pass five tests (relationship, age, residency, support, joint return) to meet the qualifying child requirements:
- A dependent must be your son, daughter, grandchild, stepchild, or foster child to pass the relationship test. In addition, dependents can pass this test if they’re the taxpayer’s brother, sister, stepsister, half-brother, etc.
- The age test is straightforward, as a dependent has to be under 19 to pass it. Your parents can claim you as a dependent on their taxes until you turn 24, but only if you’re a full-time student. The IRS doesn’t impose an age limit for qualifying children if a child is disabled.
- Although there are exceptions (Canada and Mexico residents), only US citizens, nationals, and residents can meet the qualifying child requirements. Moreover, you must live with your parents for at least six months during the year if they plan to claim you as a dependent.
- Most importantly, your parents must provide more than half of your income during a tax year because otherwise, you won’t pass the support test.
It’s important to remember that only one of your parents can claim you as a dependent on their tax return. What’s more, your parents cannot claim you on their taxes if you’re married and you file a return with your spouse even if you meet qualifying child requirements.
Qualifying Relative Requirements
Age restrictions don’t apply to qualifying relatives. Still, you must pass the residency and relationship tests before your parents can claim you as a qualifying relative on their taxes.
Children that meet qualifying child requirements cannot be claimed as qualifying relatives.
Your parents cannot claim you as a dependent if your annual income exceeds $4,300 and less than half of your support comes from them.
Claiming College Students as Dependents
Parents cannot claim their children as dependents on their tax return if they’re not full-time students older than 19. This rule doesn’t apply to disabled children.
However, if you’re currently enrolled in a college and are not yet 24, your parents might be able to claim you on their taxes. The college you’re attending must be an accredited institution, and your parents must provide half or more of your annual income.
The IRS doesn’t regard scholarship or grant recipients as taxpayers who support themselves, which enables your parents to claim you on their taxes.
If you generate enough income to file federal taxes, you must choose the ‘I can be claimed on someone else’s return‘ option on Form 1040. You generally don’t have to file federal taxes if you earn under $12,950 per year, and you can choose the Single filing status.
You can use the Worksheet for Determining Support to determine if you rely on your parents for more than half of your income.
Rules For Dependents Who Receive Support from Multiple Sources
Divorced parents must refer to ‘tie-breaker rules’ outlined in Publication 501 if they want to claim a child as a dependent. In this situation, only one parent can claim a child as dependent, as claiming the same dependent on multiple tax returns isn’t possible.
Children can be regarded as qualifying relatives of their non-custodial parents if their parents are legally divorced or separated, receive more than half of their support from their parents, and live with either parent for at least six months.
Moreover, the non-custodial parent must attach a written statement signed by the custodial parent which affirms that the custodial parent won’t claim the child as dependent for the current tax year.
Parents who reach the Multiple Support Agreement to provide over 50% of their child’s support must agree that one person can claim the child as a dependent and provide Form 2120 Multiple Support Declaration to the IRS.
The other parent can claim the child as a qualifying relative if he or she provides more than 10% of the child’s support.
The Advantages of Allowing Your Parents to Claim You as a Dependent
Most students don’t qualify for tax credits available to their parents. Hence, letting your parents claim you as dependent on their taxes will enable them to claim tuition payments they made on your behalf, as well as any grants or scholarships you receive.
Claiming you as their dependent can make your parents eligible for education tax credits and student loan interest deductions. Some parents might also be eligible for Earned Income Tax Credit, American Opportunity Credit, Lifetime Learning Credit, and Child Tax Credit.
Consequently, their federal taxes will be lower than they would be if you don’t allow them to claim you as their dependent.
You must choose the ‘I can be claimed on someone else’s return’ option on your tax return if your taxable income constitutes less than 50% of your expenses.
Common Mistakes Parents Make When Claiming Their Children as Dependents
You should consult with your parents before filing a return to avoid filing an amended return.
If you claim a personal exemption on your return and your parents claim you as a dependent on theirs, one of you will have to amend their return. You’ll receive a notice from the IRS requesting additional documents that prove your eligibility to make these claims.
The IRS will reject your return with the personal exemption claim if your parents file a return before you and claim you as their dependent. The same applies if you file a tax return before your parents and claim the personal exemption.
You and your family might face an audit if either party proves the other didn’t have the grounds for their claim.
These unpleasant situations are easily avoidable as you just have to communicate with your parents to come up with the best way to approach federal taxes.
Frequently Asked Questions
Part-time college students can only be claimed as dependents if they’re not yet 19.
Students older than 24 enrolled in a full-time college course don’t meet qualifying child requirements, but their parents can still claim them as qualifying relatives on their tax returns.
The maximum amount a parent can claim per qualifying child is $2,000. Your parents can claim $500 on their return if you meet the qualifying relative criteria.
You don’t have to file taxes if you’re older than 18, earn less than the minimum income for the single filing status, and your parents claim you on their tax return.
However, you’re required to file taxes if you earn more than $400 through self-employment activities, even if your parents claim you as a dependent.
Should You Let Your Parents Claim You as a Dependent on Their Taxes?
Most parents work hard to pay for their children’s college tuition fees, which is why allowing your parents to claim you as a dependent on their taxes is often the best financial decision for your family if they’re funding your education.
Your family must ensure you meet the qualifying child criteria before filing the return to avoid being audited by the IRS.
Speaking openly about finances and taxes to your parents is usually the best way to maximize the tax refund and go through the filing season smoothly.
Author:
Logan is a practicing CPA and founder of Choice Tax Relief and Money Done Right. After spending nearly a decade in the corporate world helping big businesses save money, he launched his blog with the goal of helping everyday Americans earn, save, and invest more money. Learn more about Logan.
