I am working on a tax return for my nephew who graduated during 2019. His Mother is not claiming him as a dependent as he worked part-time while in school in the spring and full-time after he graduated in May. He easily provided more than 50% of his support by my estimation. AGI = $35k.
He took a light spring load in school – 7 hrs (2 classes). His 1098-T has box 8 “Check if at least half-time student” checked.
The issue is the 10% credit for contributions to his 401(k) at work. He is eligible if I do not report him as a “full-time student”. He is ineligible if I do report him as such.
My gut says to not report him as “full-time” and take my (or his?) chances. 7 hours does not constitute full-time in my eyes. But that is a subjective view.
I agree with you for not reporting him as a full time student. When it comes to the IRS most people are not aggressive enough. Obviously don’t lie about anything but they’re pretty forgivable. The worse case is that you get audited but even then it’s just a discussion between you and the IRS. 7 hours a week is not full time for anything in my opinion so you should be fine. His AGI is low so it is unlikely there will be any serious red flags that pop up if you choose to do this.
By the way, why are you filing your nephew’s tax return if I may ask?