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gabriel2002
Level 1

unemployment insurance tax refund for dependents

I filed in Feb 2021 as a full time college student, dependent... my 2020 AGI was under $10k, ($5500 was unemployment benefits).  I paid $1200 in federal tax because "kiddie tax" unemployment insurance was unearned income so I was taxed at my parents' tax rate.  My parents earned over $150k in 2020.

 

Do I qualify for a tax refund (unemployment benefits under $10k not taxable) since my AGI was <$10k? Or does the IRS consider my parents' income as my income? 

 

Thanks for any help.

1 Best answer

Accepted Solutions
rjs
Level 15
Level 15

unemployment insurance tax refund for dependents

Your parents' income is not considered in determining eligibility for the unemployment exclusion. Based on the figures you provided, you are eligible for the exclusion. So you should eventually get a refund. If the unemployment was your only unearned income, you will not have any unearned income after your tax return is recalculated, because all of your unemployment will be excluded. Therefore you will not have any kiddie tax.

 

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2 Replies
rjs
Level 15
Level 15

unemployment insurance tax refund for dependents

Your parents' income is not considered in determining eligibility for the unemployment exclusion. Based on the figures you provided, you are eligible for the exclusion. So you should eventually get a refund. If the unemployment was your only unearned income, you will not have any unearned income after your tax return is recalculated, because all of your unemployment will be excluded. Therefore you will not have any kiddie tax.

 

gabriel2002
Level 1

unemployment insurance tax refund for dependents

Awesome! Thank you for the great news. 

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