Tax Talk with Dr. Mary Marshall - Tax Tips for Students: Determining Dependency for Tax Purposes

I am a student? Am I considered a dependent?

Another common tax question from students is about whether they should be considered a dependent on their parents' tax return. Although it is often discussed as a decision, a dependency determinations require specific test with very clear guidelines.

Why does dependency matter?

Dependency determines eligibility for tax credits and the allowable standard deduction, both of which directly influence your taxable income and tax liability. For students, dependency determines which taxpayer can claim the higher education credits associated with their education costs. When students are claimed as a dependent on another taxpayer's return, they are not eligible for higher education credits. Rather, the taxpayer who claims them as a dependent will also be eligible for claiming the tax credits.

When are students considered to be dependents on another taxpayer's tax return?

Although many students live away from their childhood home for most of the year, they may still be considered dependents based on the qualifying child tests (relationship, age, residency, and support) and the general dependency tests (marital status and citizenship/residency). The tests are listed in the table below. A student who meets all six criteria would be considered a dependent on their parent's tax return. It is important to carefully consider all six items because the tax return will not be accepted if a dependent student files a tax return without noting that they are a dependent on another taxpayer's return.

Generally, these tests are straightforward enough to determine dependency. A traditional college student who entered college soon after high school is likely to meet the relationship, age and residency requirements because those are written to accommodate temporary absences due to school attendance. However, students are curious about whether they meet the support test requirements. The Treasury Department provides regulations that define "support" as "food, shelter, clothing, medical and dental care, education, and other similar items" (Reg. Sec. 1.152(a)(2)). If a student's income provides more than half of the funds for those items, they may not meet the support test and would not be considered a dependent on a parent's return.