Is my wife a qualifying child for her parents to claim?

[jbanderson]

What is the name of your state? Tennessee

I did my taxes on turbo tax about 2 months ago and claimed my wife, we got married in october and she did live with her parents for 10 months out of the year.
She was only a full time student for about 2 months and then droppped the classes.
See is 23

Her parents are now trying to do there taxes and want to claim her as a dependant because her CPA says they can calim her and get college credits because she went to college. But she only went for about 2 months and didnt even finish the classes so is this true?

There CPA wants to look back at my return and possibly "redo" it if it will get more money to her parents. The CPA also mentioned something about College credits?? I didnt claim any college credits on my wife and she says I could have? My wife didnt even complete the classes she was enrolled in at the begining of the year.

sorry for such A long post I just have no were else to turn.
thanks

[xylene]

Tell the parents and the CPA to back up off y'all.

You are married and your married family life is not something they need to get all up in your grill about to POSSIBLY save a few bucks.

You do not have to go along with this.

Tell their CPA to buzz off.

[fairisfair]

Originally Posted by xylene

Tell the parents and the CPA to back up off y'all.

You are married and your married family life is not something they need to get all up in your grill about to POSSIBLY save a few bucks.

You do not have to go along with this.

Tell their CPA to buzz off.

I disagree. It certainly sounds as if the parents are entitled to claim her.

and it is education credits, not college credits if I am not mistaken.

Wait for Ginny or Ldij, poster, they are the best suited to answer your question.

[irsos]

Originally Posted by jbanderson

What is the name of your state? Tennessee

I did my taxes on turbo tax about 2 months ago and claimed my wife, we got married in october and she did live with her parents for 10 months out of the year.
She was only a full time student for about 2 months and then droppped the classes.
See is 23

Her parents are now trying to do there taxes and want to claim her as a dependant because her CPA says they can calim her and get college credits because she went to college. But she only went for about 2 months and didnt even finish the classes so is this true?

There CPA wants to look back at my return and possibly "redo" it if it will get more money to her parents. The CPA also mentioned something about College credits?? I didnt claim any college credits on my wife and she says I could have? My wife didnt even complete the classes she was enrolled in at the begining of the year.

sorry for such A long post I just have no were else to turn.
thanks

The wife is not a qualifying child and may or may not be a qualifying relative. However, if she has already filed a joint return, the parents may not claim her. If her parents want you to amend and file a married filing separate return, I would insist they reimburse you for the total of the additional tax you will owe.

[Snipes5]

If she only attended school for two months, she is not a qualifying child and they in fact cannot claim her.

[irsos]

Originally Posted by Snipes5

If she only attended school for two months, she is not a qualifying child and they in fact cannot claim her.

She could be a qualifying relative and, except for the fact that she filed a joint return, they MAY be able to claim her.

[jbanderson]

well this is what im getting off the IRS website

In general, to be a taxpayer’s qualifying child, a person must satisfy four tests:

Relationship — the taxpayer’s child or stepchild (whether by blood or adoption), foster child, sibling or stepsibling, or a descendant of one of these.
Residence — has the same principal residence as the taxpayer for more than half the tax year. Exceptions apply, in certain cases, for children of divorced or separated parents, kidnapped children, temporary absences, and for children who were born or died during the year.
Age — must be under the age of 19 at the end of the tax year, or under the age of 24 if a full-time student for at least five months of the year, or be permanently and totally disabled at any time during the year.
Support — did not provide more than one-half of his/her own support for the year

[xylene]

The IRS definitions have nothing to do with what this CPA is asking.

You do not need to allow him to do anything to your return.

[TinkerBelleLuvr]

As Banderson pointed out, since she was NOT a full-time student for 5 months since she dropped out, she is NOT a qualifying child.

In the Age test it is:
* Under age 19 at the end of the year,
* A full-time student under age 24 at the end of the year, or
* Permanently and totally disabled at any time during the year, regardless of age

.

Now as for whether she was a qualifying relative:

Qualifying Relative
There are four tests that must be met for a person to be your qualifying relative. The four tests are:
* Not a qualifying child test,
* Member of household or relationship test,
* Gross income test, and
* Support test.

Now, they may have made this argument if the daughter had made less than 3400.

But here is the clincher as to why the parents cannot claim the daughter:

Table 5. Overview of the Rules for Claiming an Exemption for a Dependent

You cannot claim a married person who files a joint return as a dependent unless that joint return is only a claim for refund and there would be no tax liability for either spouse on separate returns.

http://www.irs.gov/publications/p501/ar02.html#d0e1380

So, OP, if you tell me that you file ONLY to get the money taken out of your check back and you owed 0 taxes, then yes, the parents can take her. But chances are that you actually had income.

Now, as for the education credits, you could amend your return to take them.
http://www.irs.gov/publications/p970/ch02.html#d0e1743

Student withdraws from class(es). You can claim a Hope credit for qualified education expenses not refunded when a student withdraws.

Expenses paid by dependent. If you claim an exemption on your tax return for an eligible student who is your dependent, treat any expenses paid (or deemed paid) by your dependent as if you had paid them. Include these expenses when figuring the amount of your Hope credit.

Expenses paid by others. Someone other than you, your spouse, or your dependent (such as a relative or former spouse) may make a payment directly to an eligible educational institution to pay for an eligible student's qualified education expenses. In this case, the student is treated as receiving the payment from the other person and, in turn, paying the institution. If you claim an exemption on your tax return for the student, you are considered to have paid the expenses.

The information repeats itself for the life-long credit if the student is past the first two years of school.
http://www.irs.gov/publications/p970/ch02.html#d0e1743

[LdiJ]

In addition, in order to be a qualifying relative the person must have lived with you for the entire year. Unless OP and his wife lived with her parents, she did not live with them for the entire year.

They should certainly amend their joint return to include the education credit if it would benefit them to do so, but they need to tell her parents to back off.

This is the kind of situation that really frustrates me, because it often ends up creating bad family relationships, but parents simply need to accept that at some point they no longer get tax benefits for their children.

I am dealing with multiple clients whose children were students for the first semester of 2007, so under most "tests" the parents could claim a dependency exemption for their child, however, in each and every one of those cases they flat out fail the support test, because their children clearly made enough money (from mid-may on) that its impossible for them to claim that they provided more than 50% of their children's support for the year.

Its like banging your head on the wall trying to explain to parents that they can't prove that they paid 50% of their child's support for the year if the child has a W2 with 22k in income...sigh. However all they can see is that they aren't getting a refund and have to pay, or are getting a drastically reduced refund, because I am telling them that they can't claim the child.

[irsos]

Originally Posted by LdiJ

In addition, in order to be a qualifying relative the person must have lived with you for the entire year. Unless OP and his wife lived with her parents, she did not live with them for the entire year.

That is not true for someone who is a relative by blood or marriage.

[TinkerBelleLuvr]

Here is the backup to irsos rebuttal

Member of Household or Relationship Test
To meet this test, a person must either:

Live with you all year as a member of your household, or
Be related to you in one of the ways listed under Relatives who do not have to live with you.
If at any time during the year the person was your spouse, that person cannot be your qualifying relative. However, see Personal Exemptions, earlier.

Relatives who do not have to live with you. A person related to you in any of the following ways does not have to live with you all year as a member of your household to meet this test.
Your child, stepchild, foster child, or a descendant of any of them (for example, your grandchild). (A legally adopted child is considered your child.)
Your brother, sister, half brother, half sister, stepbrother, or stepsister.

Your father, mother, grandparent, or other direct ancestor, but not foster parent.

Your stepfather or stepmother.

A son or daughter of your brother or sister.

A brother or sister of your father or mother.

Your son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law.

Any of these relationships that were established by marriage are not ended by death or divorce.

http://www.irs.gov/publications/p501/ar02.html#d0e3763

But I agree with Ldij in having had to explain WHY the child no longer qualified their last semester of college. Most people took it well. I make it a habit with my clients to find out when their children were graduating from college to let them know in which year they needed to make an adjustment to their W-4's to avoid having to pay.

[LdiJ]

Originally Posted by Ginny J

Here is the backup to irsos rebuttal

[url]http://www.irs.gov/publications/p501/ar02.html#d0e3763[/url]

But I agree with Ldij in having had to explain WHY the child no longer qualified their last semester of college. Most people took it well. I make it a habit with my clients to find out when their children were graduating from college to let them know in which year they needed to make an adjustment to their W-4's to avoid having to pay.

Yeah, I blew the part about adult blood relatives. The strange thing is that I KNOW that...LOL, but I rarely have a case of a parent claiming an adult child who does not live in their home. I have clients who claim elderly parents, but rarely a client claiming an adult child who is not in their home.

However that last semester of college (or even high school if someone doesn't go to college but manages to get a relatively decent job) is problematic with some parents.

[TinkerBelleLuvr]

Ldij, since you are normally so spot on in your information, I was surprised. In the case of this OP, I wanted to post the exact rebuttals to his wife's parents and their CPA. I suspect that he's going to need it.

[xylene]

The parents ability to claim the daughter is interesting, but not the key point.

This married couple don't have to give the parent's CPA the time of day, whatever the IRS regs say about her status.

The poster doesn't have to play ball with the inlaws request. (Which in this persons experience seems to be hugely overstepping.)

Especially if he doesn't think that this is in HIS new family's interest, which is not really a tax law or legal issue.