Graduation Penalty

Today TaxMama hears from Robert in Texas, who’s proud of his daughter, but… “My daughter will be 24 in Nov of this year. She just graduated from college this month but will be living with me until Sept 1.
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Will I still be able to claim her as a dependent on this year’s tax return?
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Well Robert,

Congratulations all to pieces!

And, uh, no. Not even if she turned 24 on December 31.

Even though you supported her for most of the year.
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Isn’t that a crying shame? Sorry.

This is going to affect a lot of people whose children are graduating this year, or getting married towards the end of the year.

The way the law reads, your daughter must be under age 24 on the last day of the year.

To claim a dependent, there are essentially four tests (see Chapter 3 in IRS Publication 17):
https://www.irs.gov/publications/p17/ch03.html#d0e10918

Relationship, age, residence, and support. And there’s one other test – if more than one person can claim her due to relationship or support, you’re the one who’s designated as being entitled to claim her.
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So, while you definitely meet 3 of the 4 tests (or 4 out of 5), that age thing loses it for you.

I know this is painful, considering how much you undoubtedly spent on her college, living expenses, and helping her start her new life.
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But all this love will pay dividends throughout your life.

And remember, you’ll find answers to lots of questions, about dependents and other tax information, free. Where? At TaxMama.com

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