Qualifying Child Tax Question

[skives]

Ok so I'm asking this question for my fiance. Are overall question is can she be claimed by her parents on their taxes?First off let me give the details of the situation.

She was 22 at the end of 2011.
She lived with her parents the whole year.
She paid all her bills by herself and support herself fully.
She paid them rent monthly.
Her parents provided food for her.
She was not a full-time student.

The problem she is having is that her parents say they are going to claim her on their taxes and everything I have read on this subject even from the IRS website is that she doesn't qualify as their dependent. She has told her parents this and they do care they say they are still going to claim her. Our we right that they can't claim her and what should she do in this situation?

Thanks for the help.

[Dido]

The parents definitely should NOT claim your fiance as their dependent; she should claim herself.

Since she is over 18 and is not a full-time student, the relevant rules are the "qualifying relative" rather than the "qualifying child" rules. To qualify as a qualifying relative, she would have to be BOTH earning less than $3700 AND her parents would have had to be providing more than half of her total support in order for them to be able to claim her. See page 26 of IRS Pub 17 if you want a reference to site.

[Dido]

When your fiance submits her own tax return, she should claim herself. When she does this, if her parents claim her, it will alert the IRS because there are two claims to her SSN, hers and her parents. Even if she wants to obey her parents' wishes and does not claim herself (which will make her taxes higher), the system very well may catch her parents out. But it might not happen for a year or two, in which case, her parents will have extra taxes AND will be accruing interest and underpayment penalities. Tell her parents that the IRS uses sophisticated computer cross matching, show them page 26 of Pub 17, and tell them that they will be subject not only to extra tax but also to the interest and penalities.

This is NOT a choice; this is the law.

[skives]

Thanks for the advice. Thats what I said to her that it doesn't matter what her parents do but that she needs to do what the law says is right.