Ongoing issue with Dependent Child ODC status in TurboTax

[gwgaston]

When I started using TurboTax online version this year, it had all the previous year's info related to dependents.

As I stepped through my dependents and got to my 23 year old son that lives at home, does not pay more than half of his support , is a full time student, etc. All the same as last year. All answered the same (Dependent was later recreated as well with the same results). I was surprised to find that this year TurboTax was asking me the question about about whether my dependent "made $5050 or more in 2024". After all this was a Qualifying Child, not a Qualify Relative and I had only seen in the past a question about income *amounts* in the IRS ITA for Qualifying Relatives. Yes  the IRS ITA and TurboTax had always asked question about whether 

"Did ThisChild provide more than half of their own support for 2024?", but there was never a question about exact dollar amount like with a Qualifying Relative.

There are other oddities within TurboTax Online as well related to "Less common situations for ThisChild". First time there were 10 questions, but then on the edit of the dependent or creation of a new one, there are only 8 question. What is usually missing is the questions about whether "ThisChild was a full time student in 2024" and the question about "Was financially supported by a relative who lived in your home for more than half of 2024".

See the IRS info:
https://www.irs.gov/credits-deductions/individuals/mchild-tax-credit

I used the Interactive Tax Assistant to see if still eligible to claim the CTC, ACTC or ODC:

I had went through it when I initial starting entering my data approx. 3 weeks ago and  *at the time* there was no question about my child's exact income (nothing about $5050 for instance), and I got what I expected (my Child can be claimed as a ODC):

ThisChild is not a qualifying child for the Child Tax Credit.

ThisChild did not meet the age requirement. To qualify, ThisChild had to have been under age 17 at the end of 2024.

ThisChild qualifies for the Credit for Other Dependents.

Now fast-forward to today and when I go through the IRS ITA, the next to last question asked is indeed about exact income: What is ThisChild's gross income?

This was never asked before and it seems the IRS has set the limit to what it will be in 2025 ($5,200) as anything less than that get  "ThisChild qualifies for the Credit for Other Dependents." If anything it should be $5,050 for 2024, not $5,200 as that is supposed to be the value used next year when we do taxes for 2025. Again though this was always for Qualifying Relative, not Qualifying Child.

Please see this existing thread for more details:

Qualifying Dependent Child - Income

That link is to the first page of a three page discussion. Lots of eyes on it and many people seeing the same problem, but the situation is now going from bad to worse. Here is a summary of sorts from my post on page 3 of that thread:

The point of this thread was that there were bugs and contradictions in terms of what was deemed a "Qualifying Child" on the online version of TurboTax. I worked with TurboTax to confirm this. They committed to correcting the issues, and when I first checked I thought that they had "for the most part" gotten me to where I originally thought I should be (turned out not really as getting the "Dependent" status changes with the flip of a coin practically). Look back at my initial posts where I wrote about the status last year and about the IRS ITA outcome I got *at that time* of my son being a Qualifying Child that could be claimed for the $500 ODC credit. 

But in reality, all is still not well.

I went back and created two new dependents. I said "Yes" to the question about whether my dependent "made $5050 or more in 2024",  the first one came out the other end with Status: Dependent

Still though if I go back and edit this dependent after getting the "Dependent" status, I can't get back to the income question. I only see it if I create a new dependent and only that one time if they get deemed "Dependent". I will not see it again. But then using the same info with different name and SS#, I get different screens of questions for the "Less common situations for xxxx". First time there were 10 questions, but now there are only 8 for this new entry. What is missing is the questions about whether "xxxx was a full time student in 2024" and the question about "Was financially supported by a relative who lived in your home for more than half of 2024".

So they haven't fixed anything really yet.

In an interesting twist, when I go to the IRS  Interactive Tax Assistant (ITA) *now*, it DOES ASK an income question as the very last question. It asks you to enter an amount in dollars. It does not ask you "Was xxxx's gross income $5050 or more in 2024?" No question about amount of income was there before. But now when I put in the income it switches from Qualifying Child to Qualifying Relative and says does not qualify. Can't make this stuff up!

So NOW the IRS ITA I linked previously is saying he does NOT qualify! Even better the last modified for the page still reads as Nov 2024. 

And one more, one more thing: The IRS ITA switches from saying " xxxx qualifies for the Credit for Other Dependents" to "xxxx does not qualify for the Credit for Other Dependents" when you put in a value of $5,200 or more... not $5050.

So this is a mess that frankly is not worth a $500 ODC credit to me. I plan to call TurboTax back and update them, but to be safe at this point:

It would seem best if neither I nor my son claimed him.

[DawnC]

You can claim him and take the $500 Credit for Other Dependents as he does qualify.   There does seem to be some confusion with the interview questions, both on the IRS - ITA and TurboTax.   Can you confirm you are using TurboTax Online Deluxe edition?   

I would like to take a deeper look at this. However, I need a diagnostic file, which is a copy of your tax return that has all of your personal information removed.  You can send one to us by following the directions below:

For TurboTax Online users:
 

1. Sign into your online account.
2. Locate the Tax Tools on the left-hand side of the screen.
3. A drop-down will appear. Select Tools 
4. On the pop-up screen, click on “Share my file with agent.”
5. This will generate a message that a diagnostic file gets sanitized and transmitted to us.
6. Please provide the Token Number that was generated in your reply.   Thank you!

[gwgaston]

@DawnC  - I opened a case with TurboTax on Jan 16th for this issue. Case 1 5 4 0 5 1 5 3 3 5 (remove spaces due to not so smart PII data validation filter). Spoke to someone for better part of an hour but the case was closed same day I think.

I'm using For TurboTax Online - Premium. I can upload you a diagnostic file once I'm not mobile, but note that many other in my referenced thread are having this exact issue.

And even taking TT out of the mix the whole change with the IRS ITA is perplexing.   As if it wasn't already enough that TT was a little flaky, but now the IRS ITA is expecting a gross income less than $5200 for what should be a Qualifying Child???  😄

[DawnC]

Thank you for the information regarding the Jan 16th case and the linked thread detailing the issue.  No rush on the diagnostic file, the more examples we have, the better. 🙂

[gwgaston]

@DawnC  - Token # 1263997

[gwgaston]

Spoiler

lots of screenshots

Lets start with my existing son's entry. I will edit it and you will see from the screenshots that once you complete and have a status of "dependent" that during the edit, the question of the $5050 income never returns:





Now let's create a new dependent named Bogus with the same info otherwise to see the screens:



With nothing yet selected (once you do there is no deselecting) we see the below.



Once I select 'Son' we see the questions are adaptive, and the $5050 question appears:



More selections refine the subsequent questions:

Now here if I say "No" to the $5050 income question I get another question (which would ultimately be duplicated in the "Less common info" section just worded differently)




But I will sect "Yes" as my dependent made more than $5050:



Now we get the less common questions that ask about, among other things, my dependent was a full-time student in 2024:



Unlike the first time I ran through this a few weeks ago, now "Bogus" qualifies as a dependent! Yay!
 


Now if you continue through and then Edit this Dependent, or you just hit "Back" on the the above screen, notice the additional "less common question asked"

[DaveF1006]

It depends. As you enter information about your child, there is a question on whether they made more than $5050 for the year. Here you can answer yes if he did but in the very next screen, you will select he is a full time college student. Checking this box will allow you to claim your child as a dependent even if he made more than $5050 in 2024.

Perhaps, Turbo Tax could make this less confusing by asking the question if your child is a fulltime student first. Then if he/she isn't then the question could be asked if he or she made more than $5050 in 2024?

Anyhow, I hope this clears up any confusion you may have. You have put a lot of work in this working with the IRS Interactive Tax Assistance and posting these screenshots. Turbo Tax isn't always perfect but we try to do our very best in meeting the needs of all of our customers. We do appreciate you.

@gwgaston 

[gwgaston]

• @DaveF1006 

<  "Here you can answer yes if he did but in the very next screen, you will select he is a full time college student. Checking this box will allow you to claim your child as a dependent even if he made more than $5050 in 2024"

Well it does now. When I created the initial thread 3 weeks ago it did not. You just need to look at that thread. You will see I and many others in that thread (they came along on page 3  so not so long ago)  answered these questioned just as you describe and was told our child was "not a  dependent this year". Many in that thread simply chose to lie and answer "No" to the $5,050 question just to get around it.

 That was the whole point of my post initially as TurboTax had it wrong.  After my case was opened, it looks like they fixed it so that in the end it works out as an ODC, as expected. And yes we were all saying full time student etc. We know what the answers should be as we did this last year.

What is not fixed is the odd functionality. Go back and EDIT one of these now deemed "dependents" and you will never see the the question about $5,050 again. Only on the initial run. And the last screen of "Less common situations" questions change as well.

Lastly, the IRS ITA is now asking an gross income question as well as the next to last question. The problem is that there the cutoff is not the $5,050 dollars that it should be for a Qualifying Relative for 2024 taxes, but it is $5,200 which is the point stated will be used next year for 2025 taxes. No this is not TurboTax's problem, but they are in a better position to inform the IRS about it than the rest of us mere fillers 

Again here is the link:

https://www.irs.gov/help/ita/does-my-childdependent-qualify-for-the-child-tax-credit-or-the-credit-f...

Next to the last question is now an edit box for gross income. Anything under $5,200 it will tell you (after you answer Yes to the Support test question) and you are told that "xxxx qualifies for the Credit for Other Dependents", BUT if you answer the gross income question with any amount equal to or over $5,200 it will tell you (after you answer Yes to the Support test question)  that "xxxx does not qualify for the Credit for Other Dependents" with the reason given as "xxxx did not meet the Qualifying Relative Gross Income Test.

So they seem to be combining now the Qualifying Child and Qualifying Relative tests into a type of merged Qualifying Dependent test with erroneous results.

A qualifying child, a child that meets all the criteria that we all know (age, relation, student, did not pay for more than half of their own support, etc) can earn any amount. Before the fox TurboTax was saying basically no they can't

 Now TurboTax still asks the income question (initially - not on an edit) but has fixed the outcome to be right. But now we have the IRS ITA getting it wrong (in the 5200 amount and that it applies to a qualifying child when you answer all the other questions right .

[DaveF1006]

 It depends. It's not a merged Qualifying Child and Qualifying Relative tests because the two are different. I think the program is creating a shortcut in asking first if the child is over the income threshold and then in the next screen if he doesn't meet any of those conditions, then he/she doesn't qualify.  As I may have mentioned, it's not perfect.

As an FYI to you, Turbo Tax Desktop asks the question if the child is a college student, then asks about their income. 

[gwgaston]

@DaveF1006  You aren't helping in this thread. Likely skimming and not reading the whole post.

This year its buggy plain and simple. 

Not even a mention about the new IRS ITA that will NOW say your should be qualifying child does not get the ODC credit if they make more than 5,200 (a number that is for 2025 and qualifying relative)

[DaveF1006]

No. the qualifying child test or qualifying relative tests haven't changed. Since the IRS ITA tool mentions that $5200 is the income threshold for claiming qualifying relatives. This means it's analyzing tax information data for 2025. (It's $5050 in 2024).

If the ITA tool asked for your child's birthdate, they may be 24 or older in 2025. At this point, if your child made more than $5200, they wouldn't qualify as a qualifying relative for 2025. 

@gwgaston 

[gwgaston]

Rubbish. It starts off asking what year you are using it for. Obviously 2025 is not an option but it is using 5200 for 2024. That is a bug. Just run through the ITA yourself! Wow you guys are so sure you are right that you don't put in any effort.

And the ITA has changed as I have a screen shot of every question before the change. 

All you have to do is look at the thread I linked to here from 3 weeks ago, but like most, you are too busy trying to sound "right" instead of putting in the effort. And if you can't bothered to even look then your opinion is not too valuable here. Move on to something you know.

[gwgaston]

https://turbotax.intuit.com/tax-tips/family/rules-for-claiming-a-dependent-on-your-tax-return/L8LODb...

Not to bore you with the fuff,  I will quote (emphasis mine) the relevant section of the FAQ:

Frequently asked questions about claiming dependents

How much can a dependent child earn?

A qualifying child can earn an unlimited amount of money and still be claimed as a dependent, so long as the child doesn't also provide more than half of their own support.

If the dependent child is being claimed under the qualifying relative rules, the child's gross income must be less than $5,050 for the year in 2024. This threshold increases to $5,200 for 2025.



Now let's run through the *current* IRS ITA (the actual ITA is started from a  "Begin" button will start a session so not linked here): 

Does my child/dependent qualify for the child tax credit or the credit for other dependents? | Inter...

After clicking "Begin"









Note the age and other questions below:
(EDIT: Had another screen shot in with different age for testing... this is the correct one)





Next question is well silly... why else am I on this form:




Now here is the income question that DID NOT APPEAR on the earlier version of the ITA (it may have if the answers to the above question were different but they weren't). I'll put $6k here but it can be any number >= $5200.00
 


Did not meet the Qualifying Relative gross income test!!!! 

EDIT: I had another test here that had my older son's BD. This screenshot below is the orrect one for a child that should qualify (BD is actually one year younger than my son in this test as I put year as 2002 but 2001 should work as well).




Now lets change the gross income to just below $5,200.00 (by a penny):




Now look at the next question! In previous versions of the ITA this came first so likely that is why I didn't see the income question. But now thew IRS has it all messed up:


Tada!! Fred qualifies! 



@DaveF1006  - Now I did it for you.

[gwgaston]

Here is a better or at least "it gives the right answer" IRS ITA:

https://www.irs.gov/help/ita/whom-may-i-claim-as-a-dependent

Click the "Begin" button (not shown) then answer the question just like the other ITA (screenshots provided):




















You can see below that there was no question of exact income (or if over $5,050) as the birth date given was for a Qualifying Child under the age of 24 (22 in the first example):



This second example is for a 23 years old and show it works fine as expected:

[gwgaston]

Now for completeness I will show the screen shots for a 24 year old that does not qualify (as expected as they are over the age limit for Qualifying Child and do not meet the other requirements of a Qualifying Relative):













Now if this 24 year old (or older) Child were disabled or made less than $5,050 they would, as expected, be deemed a dependent.