Does Student Status Affect a Tax Return?

Still being in school makes you eligible for some tax breaks but disqualifies you for others.

Still being in school makes you eligible for some tax breaks but disqualifies you for others.

Unlike the different tax tables for married, single and head of household taxpayers, there's no separate tax rates for students. Nor does your income earned as a student get treated any differently than income after you finish school. However, that doesn't mean that being a student doesn't have any affect on your tax return.

Full-Time Student Defined

Sometimes, just one class can feel like a full-time job. However, the IRS defines a full-time student as anyone who is enrolled full-time at a school for any part of at least five months during the year, based on the number of credit hours you're taking. For example, if you're a full-time student during a semester that starts in January and ends in May, you're a full-time student for the entire year. However, the months don't have to be consecutive. For example, if you're a full-time student in January, February, June, July and December, you're a full-time student.

Claimed as a Dependent

If you're a full-time student, the age limit for your parents claiming you as their qualifying child goes up. Usually, you're only a qualifying child if you're under 19 at the end of the year. However, if you're a full-time student, you can be claimed as a qualifying child until the year you turn 24 years old. Of course, you still have to meet other requirements, like spending half the year with your parents (with exceptions for time at school) and providing no more than half your own support. And, when you get too old to be a qualifying child, your parents might still be able to claim you as a qualifying relative regardless of your student status.

Retirement Savings Credit

The retirement savings credit offers a tax credit for putting money in a qualified retirement account, like an IRA or 401(k). But, if you're a full-time student, you're excluded from claiming the break. Other student statuses, such as being enrolled half-time, have no effect on the credit, but there's other criteria. You also have to be over 18 years old and your modified adjusted gross income has to be below the limits for your filing status.

Education Tax Breaks

Your status as a student affects which education tax breaks you can claim. For example, the American Opportunity Credit -- generally the most generous credit -- requires that you be enrolled at least half-time during one semester of the year. In addition, you must be studying toward a degree, must not have finished your first four years of college, and may not have any felony convictions for drugs. If you can't meet those conditions, you can qualify for the Lifetime Learning Credit or for a deduction of tuition and fees with just one class.


About the Author

Mark Kennan is a writer based in the Kansas City area, specializing in personal finance and business topics. He has been writing since 2009 and has been published by "Quicken," "TurboTax," and "The Motley Fool."

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