My 2021 1040 has been submitted. I've learned that the income for my claimed dependent was not right

[msthrifty]

I am not clear on how to handle the recovery rebate issue on the 1040X, and I'm afraid that waiting to file 1040x will result in a penalty.  Shall I send the 1040x in now with payment?  The e-file has been accepted but not yet processed.

[xmasbaby0]

Please explain what you mean by the "income for my claimed dependent was not right."   Before you amend too hastily----we should understand why you are amending.   And ....sending an amended return before they process your original return can create confusion and delay.   It sounds like you are in too much of a hurry.

[msthrifty]

Thank you - I was told by my adult child that his income for last year was $4204, which would allow me to claim him as my dependent (I provided ~80% of his support last year when he could not work).  However, AFTER I e-filed this past week, he told me that he had made a mistake and his income (on his W-2) was $4402.   

So, not only was I wrong to claim him as a dependent (which had lowered my tax to $0) but it also erroneously made me eligible for an extra Recovery Rebate Credit. 

So now I need to send in a payment, and I need to not get that Recovery Rebate Credit. 

I know that I can file a 1040X, but the questions are

1) timing - if I wait, I will pay late and be subject to a penalty + interest (why I am rather in a hurry!) 

2) how do I remove the Recovery Rebate Credit on the 1040X?  Is there any way to prevent that from being sent?

Can I go ahead and send the amount due in, regardless?

[xmasbaby0 · Accepted solution]

You should not get penalized for that.  Amending before they have processed your original return can just cause confusion and delays.   Wait for the IRS to process the return, and yes, you will have to pay back the $1400 with your amended return.  

One other thing---was the "adult child" a full-time student in 2021?  If so the $4300 income does not come into play.   If he was under 24 and and was a student you can still claim him even if he made over $4300.

[msthrifty]

Thank you for responding so quickly!

They won't assess a penalty for paying past the deadline?  I had no withholding.   That doesn't sound like our IRS!  Can you explain why you think they will not?

No, not a student.  Unable to work due to illness, unfortunately.

[MayaD]

You son might still qualify as a dependent on your return even if he made $4402 as long as he didn't provide more than half of his support and he meets all the other requirements. 

Qualifying child

• Are they related to you? The child can be your son, daughter, stepchild, eligible foster child, brother, sister, half brother, half sister, stepbrother, stepsister, adopted child or an offspring of any of them.
• Do they meet the age requirement? Your child must be under age 19 or, if a full-time student, under age 24. There is no age limit if your child is permanently and totally disabled.
• Do they live with you? Your child must live with you for more than half the year, but several exceptions apply.
• Do you financially support them? Your child may have a job, but that job cannot provide more than half of her support.
• Are you the only person claiming them? This requirement commonly applies to children of divorced parents. Here you must use the “tie breaker rules,” which are found in IRS Publication 501. These rules establish income, parentage and residency requirements for claiming a child.

[msthrifty]

He qualified as an adult dependent, according to the IRS Interactive Tax Assistant  tool.  Not a student, unmarried, did not live with me, but is a citizen, has a SS#, and I provided ~80% of his support (he was able to work for only 1 month in 2021)