In order to claim someone as your dependent, there are five tests: relationship, age, residency, support and joint return. Most of these tests are pretty straightforward, but we get a very common question about residency: “If my dependent is away at college for nine months out of the year and gets a scholarship, can I still claim them as a dependent?”

The answer to this question is yes, in most circumstances.

The IRS Publication 501 states that children must live with you for more than half of the year to be claimed, but there is an exception for temporary absences. Your child is considered to have lived with you during periods of time when they are absent due to education.

The same IRS publication also states that in order to meet the support test, the child can’t have provided more than half of his or her own support for the year. It also specifically states that “A scholarship received by a child who is a student isn’t taken into account in determining whether the child provided more than half of his or her own support.”

For more information on who you can and can’t claim as a dependent, you can visit the IRS publication 501, “Dependents, Standard Deduction and Filing Information” at https://www.irs.gov/publications/p501

Clergy Financial Resources offers several options to help you with your tax questions or filing. Here are two options available. 

• • Pro Advisor I Tax Support
    This support service provides you comprehensive answers to your notice questions. This support service is available at a flat rate of $45.00 for each 30-minutes session.
  • Learn More About Tax Services Designed for Clergy
    As a specialist within our industry, our annual tax service is uniquely designed and bundled with three valuable services; Clergy Support which provides answers to your questions throughout the year; tax preparation to ensure compliance while minimizing your tax liability; Estimated Payment Support to prevent those unwanted surprises.

Clergy Financial Resources reviews unreimbursed ministry expenses as part of the 1040 review process, to make sure that deductions aren’t missed. If you are looking for someone to prepare your 1040 return, visit our website at https://www.clergyfinancial.com/services/clergy-tax-preparation/

Clergy Financial Resources serves as a resource for clients to help analyze the complexity of clergy tax law, church payroll & HR issues. Our professionals are committed to helping clients stay informed about tax news, developments and trends in various specialty areas.

This article is intended to provide readers with guidance in tax matters. The article does not constitute, and should not be treated as professional advice regarding the use of any particular tax technique. Every effort has been made to assure the accuracy of the information. Clergy Financial Resources and the author do not assume responsibility for any individual’s reliance upon the information provided in the article. Readers should independently verify all information before applying it to a particular fact situation, and should independently determine the impact of any particular tax planning technique. If you are seeking legal advice, you are encouraged to consult an attorney.

For more information or if you need additional assistance, please use the contact information below.

Clergy Financial Resources
11214 86th Avenue N.
Maple Grove, MN 55369

Tel: (888) 421-0101 
Fax: (888) 876-5101
Email: clientservices@clergyfinancial.com