Qualifying Daughter

Today TaxMama hears from Laura in the TaxQuips Forum, with these two common issues.  “(1) My daughter turned 24 in December of 2009.
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  During the entire 12 months of 2009 she attended school full-time; did not work; earned 0 income; and will not be filing a tax return. She lived at home and we provided 100% of her support.  Are we allowed to consider her a dependent on our 2009 tax return?  It appears from what I read that we could if she was our niece (under the “relative” qualifications), but not as our daughter (under the “child” qualifications).  (2) We paid 100% of her tuition costs in 2009.
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Can we take the education and/or credit for this like we did on our 2008 return?” 

Rita Lewis, an Enrolled Agent in CT, was kind enough to provide an answer over the Labor Day holiday.

Rita says, “as you wrote, there are now two ways to qualify a dependent.  Your daughter is too old to be a qualifying “child,” but if she meets all the requirements she may be a qualifying “relative” and still be your dependent.  Step through the instructions for Form 1040 Line 6c beginning on page 18 of the IRS instructions (and, yes, a daughter is included in the definition of “relative”).  Once you determine if she qualifies as your dependent, then you can determine if you qualify for an education benefit.  For instance, Line 49 Education Credits instructions are on page 40 of the instructions to the Form 1040.”

Thank you Rita! One other thing TaxMama was going to check on was whether or not Laura’s daughter would still qualify if she were not living at home. Typically, parents and qualifying child would still be dependents, regardless of where they lived.
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Does that apply to qualifying relatives?
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  Yes it does.

See the list of qualifying relatives who do not have to live with you.  This may of help to some of you.

And remember, you can find answers to all kinds of questions about dependents, education credits, and other tax issues, free.
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Where? Where else? At www.TaxMama.com.

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