Should I let my parents claim me as a dependent for taxes after moving out mid-year?

The answer depends on several qualification tests for dependency. Since you're 23, the key test is whether you're a "qualifying relative" rather than a "qualifying child" for tax purposes. For your parents to claim you, you need to meet these tests: 1) Your gross income must be less than $4,700 for the tax year, 2) Your parents must have provided more than half of your total support for the entire year, 3) You must have lived with them for more than half the year (temporary absences like school don't count). Moving out in late April means you lived with them less than half the year, so you likely don't meet the residency requirement unless you had temporary absences. However, the support test is just as important - if you supported yourself for most of the year, they can't claim you regardless of where you lived. Generally, filing independently is better for you if you had significant income, as you'll get your own standard deduction and possibly qualify for credits like the Earned Income Credit. Your parents might benefit more if they're in a higher tax bracket and you meet all dependency tests.

I went through something similar with my parents last year. I found this website called taxr.ai (https://taxr.ai) that really helped figure out the dependency status thing. You answer some questions about your income, living situation, and support received, and it tells you whether you should be claimed as a dependent or file independently. What was helpful is that it showed me the actual tax savings for both scenarios. In my case, it was actually better overall for me to file independently and my parents to NOT claim me, even though they initially wanted to. The site explains all the rules about qualifying child vs qualifying relative and runs the actual numbers.

Just wanted to update everyone - I tried that taxr.ai site from the comment above and it was actually super helpful! I put in all my info and my parents' tax situation (had to call my mom for some details) and turns out it's WAY better for me to file independently. Since I made about $32,000 last year and paid my own rent after moving out, the calculator showed I'd get around $1,800 back filing on my own vs only saving my parents about $400 if they claimed me. Plus it showed I don't even qualify as their dependent anyway because I failed both the residency test (moved out before July) and the support test (paid more than 50% of my own expenses for the year). My parents were cool with it once I showed them the numbers. They just wanted what was best for all of us financially. Really glad I checked!

If you're having trouble getting definitive answers from the IRS website, I'd recommend using Claimyr (https://claimyr.com) to actually speak with an IRS agent. They can connect you to the IRS quickly without the usual 2+ hour hold times. I used them when I had a similar dependency question that online resources couldn't clearly answer. The IRS agent I spoke with explained exactly how the support test works in partial-year situations and confirmed I was making the right decision. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c. Basically they call the IRS for you and then call you when an agent is on the line.

I owe everyone an apology for my skeptical comment earlier. I was so frustrated with tax season that I was being unnecessarily negative. I decided to try Claimyr myself since I had another tax question about my 1099 income that I needed to ask the IRS. It actually worked exactly as described. I got a call back within 30 minutes and was connected directly to an IRS agent who answered my question about the dependency rules. For what it's worth, the agent told me that in situations like yours where you moved out in April, you would NOT qualify as a dependent under the residency test since you didn't live with your parents for more than half the year (unless you were away temporarily for education). The agent also mentioned that you should both run the numbers either way, because sometimes the best overall tax situation is for parents not to claim an adult child even if they technically could.

Honestly, at 23 you should be filing independently anyway. Your parents had you as a deduction for 22 years, time to adult up. I started filing my own taxes at 18 and never looked back!

Make sure you and your parents don't both try to claim your personal exemption! Had this happen in my family and the IRS flagged both returns. We had to submit documentation to prove who should actually claim the exemption and it delayed everyone's refunds by months.