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George Saenz, the Bankrate.com Tax Talk columnistClaiming a foreign student as a dependent

Dear Tax Talk,
Can I claim an international student as a dependent?

My nephew currently lives in my house and has been living there for the last two years. He is an international student with an F1 visa, attending college. I pay everything including tuition and living expenses. Can I claim him as a dependent or can I claim an education tax credit? Thank you very much for your help!
-- Nancy

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Dear Nancy,
You cannot claim a person as a dependent unless that person is a U.S. citizen, U.S. resident alien, U.S. national or a resident of Canada or Mexico for some part of the year.

The definition of resident alien is different for tax purposes than immigration purposes. A person becomes a resident alien by either having a green card, which your nephew does not, or by being substantially present in the U.S., which your nephew sounds like he has been.

However, when you go look at the rules for substantial presence in the U.S., you do not count the days that you are present in this country under an "F" visa.

Accordingly, even though your nephew has been present in the U.S. for two years, he does not become a resident for tax purposes by virtue of being here on a student visa. You cannot claim him as an exemption on your tax return.

IRS Publication 501 relating to exemptions states:

However, if you provided a home for a foreign student, you may be able to take a charitable contribution deduction.

The charitable deduction is discussed in Publication 526. In order to claim the child, he or she has to be a full-time student in the 12th or any lower grade at a school in the United States and cannot be related to you. Unfortunately you do not qualify for the charitable deduction either.

In order to claim higher education credits such as the Hope or Lifetime Learning credit or the Higher Education deduction, the person must be your dependent.

Again, you've been shut out. Hopefully your nephew will treat you better than your Uncle Sam.

Bankrate.com's corrections policy -- Posted: Nov. 1, 2007
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