Sending your child to college can be expensive, but she can still save you some money on your tax bill. The Internal Revenue Service lets you claim a full-time college student as a dependent if she meets the qualifying guidelines. She doesn’t have to live with you while she attends school in order to be considered a dependent.
A student must be younger than 24 as of Dec. 31 of the tax year in question to be claimed as a dependent. She has to be enrolled as an undergraduate at an accredited university at least half time, so a full-time student who drops a course or two won’t affect her status. Ordinarily, a child must live with you at least 50 percent of the time, but if she's away at college, her time there is considered the same as if she was living in your home. You also have to provide at least 50 percent of her support. Grants and scholarships received by the student don’t count for IRS purposes. If the student has a part-time job and a scholarship, only the former is counted when determining how much she supports herself.
Filing the Return
If the student doesn’t file her own return, the parents claim her as a dependent. In addition, the parents claim all scholarships, grants, tuition payments and educational tax credits. If the student files her own return, she’ll check the box indicating that she can be claimed on someone else’s return.