Claiming my Cadet Son on my taxes....

Discussion in 'Coast Guard Academy - USCGA' started by Wonderfulmom, Mar 24, 2017.

  1. Wonderfulmom

    Wonderfulmom Member

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    Hi. My CPA just told me I and should claim my son who is at USCGA on my taxes because he's under 24, in college full time, comes home when he is not at school and we provide a decent amount of his support (plane tickets home, cell phone, food and care when home, etc.). Does anyone else do this? What relevant info about this should I know about this?
     
  2. DrMom

    DrMom 5-Year Member

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    No, you cannot do it. He is a full time employee of the federal gov't. He is an adult who will pay his own taxes.
    Do not let your CPA allow you to break the law.
    Hope that helps.
     
  3. 5Day

    5Day Member

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    Did your CPA actually say "decent amount" of support. The actual standard is "more than half". This is from USMA http://www.usma.edu/parents/SiteAssets/TaxInformationforParents2015.pdf "... Most importantly, in order to claim a dependent the taxpayer must be able to show that the he/she provided more than half the dependent's support for the tax year. After totaling cadet pay, food, education, room and board the Army and your Cadet show a combined contribution of more than $40,000 in support.

    You should find out how much support USCGA provides. It is probably similar. That being said some parents do claim their cadet as a dependent. Most importantly, make sure you and your DS do not both claim the same dependent.
     
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  4. beantown31

    beantown31 Member

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    Per my mom's CPA, The only way u can do it legally is if you can show that you provide kore than 50% of there support throughout the year. The cost of what the academy puts into us over the course of the year beyond what we will/are paying for is substantial.
     
  5. ktnatalk

    ktnatalk Sailor. Shipmate. Parent.

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    Agree with above posts. And if you choose the living with you for over six months rule, (vice the "monetary support"), you can't if he is not in his first year. The brief was provided to the midshipmen on 2 March by the JAG.
    They receive their pay each month and have their own W2 - they are treated differently than normal college students.
    IMG_4213.PNG
     
  6. Wonderfulmom

    Wonderfulmom Member

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    Ugh. Well, that stinks. Thanks for the info though.
     
  7. ktnatalk

    ktnatalk Sailor. Shipmate. Parent.

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    *virtual high fives for stopping someone from making a mistake!
     
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  8. Wonderfulmom

    Wonderfulmom Member

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    I just found this on another service academy chat board though:

    Can most parents of service academy students claim them as dependents? YES

    My parents received a letter from USNA early in 1976, stating what is the consensus of the comments on this thread: that for the previous calendar (the 1st half of my plebe year) year my parents could claim me as a dependent, but that I was now "independent" and that in 1976 and later, they could not. It seemed to make sense (as do the posts in this thread) and they did not claim me as a dependent after 1975. However, with my child now a plebe at USMMA, I've needed to consider this issue for myself, and applying my years of professional experience preparing income tax returns, I've come to the opposite conclusion. As long as the service academy student is under age 24 and lives in the parents household when not at the academy or away for other military duties, I believe the parent is entitled to claim the child as a dependent. The error in all of the posts, including the apparently conclusive one from the USMA Treasurer, is using the WRONG "Support Test" in trying to answer the question.

    There are two IRS defined dependency categories: Qualifying Child and Qualifying Relative. Each has seven tests which must be met, and both include a "support test," but the support test is different for the two categories.

    The support test for qualifying child is "The child cannot have provided over half of his or her own support" during the tax year.
    The support test for qualifying relative is "The taxpayer must have have provided over half of the relative's support" during the tax year.
    If you read all the posts, they apply the wrong support test, the one for a qualifying relative, conclude correctly that very few if any parents of service academy students can meet this test, and incorrectly conclude that parents cannot claim service academy students as dependents on their tax returns.

    The correct assessment has to consider the seven tests for qualifying child, and if you pass all seven, claim the child as a dependent. (Please note that these seven tests DO NOT include the Gross Income test required to be a qualifying relative. Some of the posts incorrectly assume that because they are being paid a monthly salary by the military services (unfortunately not true of USMMA students), that this income makes them independent).

    Apply the seven tests for a QUALIFYING CHILD:
    Test 1: Is the taxpayer (i.e., the parent) a dependent of another person? If YES, you fail the test and cannot claim the student as a dependent. If NO, proceed to
    Test 2: Is the dependent filing a joint return with a spouse. If YES, they wouldn't be at an Academy, so obviously NO and proceed to
    Test 3: Is the dependent either a US citizen, US National, or a resident of the US, Canada, or Mexico. If YES, proceed to
    Test 4: Is the child the taxpayer's son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, or a descendent of any of these? If YES, proceed to
    Test 5: Member of household test. The child must have lived with the taxpayer for more than half of the tax year. (Please note that during "temporary absences" such as to attend school or for miltary services, the child is considered to be living with the taxpayer). So YES and proceed to
    Test 6: Age test. The child must be EITHER under age 19 at the end of the tax year OR under age 24 at the end of the tax year and a full-time student for any part of at least 5 months during the tax year. If YES, proceed to
    Test 7: Support test. The child cannot have provided over half of HIS or HER OWN SUPPORT during the tax year. So, if your academy student meets this test, CLAIM THE CHILD AS YOUR DEPENDENT. Specifically, the parent does not have to provide over 50% of the students support (wrong support test) and support provided by a 3rd party, such as a military service or the Academy beyond the taxable pay to the student, is not support provided by the student. The taxable pay actually used by the student for their own support must be considered, but this amount pales in comparison to that being provided by the parents and the Academy, so I don't see how any academy student who was not independent before going to the acaedemy could fail this test.

    So my conclusion, if you accurately apply the CORRECT seven tests to your child at one of the service academies, I conclude that almost every parent is entitled to claim their academy child as their dependent on their income tax return. The tests most likely to be failed by some academy students (those with prior military service prior to entering the academy) would be the age and member of household tests, and if those are failed then the seven tests for qualifying relative can't be met for them either, so for those few students, the parents cannot claim them as dependents.
     
  9. Wonderfulmom

    Wonderfulmom Member

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    Hmmm....so now I wonder after reading the above if my CPA is actually correct...
     
  10. ktnatalk

    ktnatalk Sailor. Shipmate. Parent.

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    You read old and wrong info. Not a tax lawyer and not responsible for things I said on an anonymous forum.
     
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  11. Wonderfulmom

    Wonderfulmom Member

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    Here's the IRS publication guide about it. The only gray area is whether his living at the Academy constitutes a temporary absence. Since he will be sent to a duty station...probably not.

    https://www.irs.gov/pub/irs-pdf/p504.pdf
     
  12. Wonderfulmom

    Wonderfulmom Member

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    Kind of bummed that my tax preparer gave me bad advice.....
     
  13. Wonderfulmom

    Wonderfulmom Member

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  14. alaska66

    alaska66 USCGA Admissions Partner 5-Year Member

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    The above post referenced was concerning a midshipman at USMMA, where they are NOT active duty military members. Cadets and midshipman at USMA, USNA, USAFA and USCGA are active duty military members, and their independent status is discussed in IRS Revenue Ruling 55-347. http://www.taxalmanac.org/index.php/Rev._Rul-405.html
     
  15. kinnem

    kinnem Moderator 5-Year Member

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  16. Happy2BaNavyMom

    Happy2BaNavyMom Member

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    Darnit...now I'm just confused! I always figured I could claim him Plebe year...but with the "Temporary Absences" being described as "Military" - - that would seem to say you could all 4 years??? BUT, is it "Temporary Absences" and Half of support? Or does one trump (no pun intended) the other? Wine....I need more wine.
     
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  17. Sledge

    Sledge 5-Year Member

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    I am a CPA. I do not claim my cadet as a dependent. Have not including plebe year. What I provide him is <50% of his support.
     
    Last edited: Mar 24, 2017
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  18. USCG Master

    USCG Master USCG 100 Ton Master

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    As an accountant. You will not be able to claim him. He will not live with you the majority of the year. Nor will you be providing over 50% of the cost to house and feed. It will be challenged by the IRS.
     
  19. Sledge

    Sledge 5-Year Member

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    There are many stupid ones. As in any profession.
     
  20. Wonderfulmom

    Wonderfulmom Member

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    I might use Turbo Tax next year! :blowup:
     
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