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Ongoing issue with Dependent Child ODC status in TurboTax
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.