Can I claim my son who just graduated from college but is paid while in a scholarship program?

by Daria D. Palaschak, CPA | Nov 04, 2016
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My son was a full-time college student until June of 2016 when he graduated. Shortly afterward he entered the military under a medical school scholarship program. He is not on active duty, but he is paid while he is in school and he also received a $20,000 bonus. Can I still claim him for this year?

Based on the facts provided, you might not be able to claim your son as a dependent because of the son’s income level. The matter really depends on how much money the son needs for “support” during the year in question, and also whether the son was a full-time student under the age of 24 as of the last day of the tax year.

Generally, to be claimed as a dependent the son must meet all of the following:

  • Is unmarried (special rules exist for married children)
  • Is a U.S. citizen, resident alien, or resident of Canada or Mexico
  • Is either under age 19 or a full-time student* under age 24
  • Lives with the taxpayer for more than half the year
  • Does not provide more than half of his own support (This may be the deal breaker: —The $20,000 plus the scholarship may exceed half of what your son needs to support himself, but that would depend on how much the annual tuition and living expenses are. As parents, you would need to provide more money/support to your son than he providing himself or receiving from other sources.)
  • Does not file a joint return
  • Is not a qualifying child of another taxpayer (This rule is to eliminate divorced parents both trying to claim a child)

*A full-time student is a student who is enrolled for the number of hours or courses that the school considers full-time attendance. To qualify as a student, the person must be, during some part of each of any five calendar months of the year (the months do not have to be consecutive), either of the following:

  1. A full-time student at a school that has a regular teaching staff, course of study, and a regularly enrolled student body at the school
  2. A student taking a full-time, on-farm training course given by a school described in (1), or by a state, county, or local government agency

This information is found in the “Personal Exemptions and Dependents” chapter of IRS Publication 17, Your Federal Income Tax.

In addition, there is a link on the IRS website to help evaluate whether someone can be claimed as a dependent.

For more resources, check out PICPA’s Money & Life Tips, Ask a CPA, or CPA Locator.

Answered by: Daria D. Palaschak, CPA, is tax manager with Sisterson & Co. LLP in Pittsburgh, Pa.

Disclaimer
The responses are based on the limited information provided by the questioner and apply the laws and regulations at the time of posting. Other options could arise as rules and regulations may change over time, including but not limited to the passage of the Tax Cuts and Jobs Act of 2017. They are intended to provide general information, not specific accounting or tax advice; they are not intended or written to be used and cannot be used for the purpose of avoiding or evading taxes or penalties under the IRS code or regulations. Views expressed do not imply an opinion of the PICPA, its officers, directors, employees, or members.
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