Anonymous
Not applicable

Why am I subject to the Kiddie Tax and why can't I claim a Recovery Rebate Credit?

I believe that I am being subjected to the Kiddie Tax when I shouldn't be. Take note of these facts:

  • I am a full-time student under the age of 24. My birthday is 5 September 2001.
  • I received $6952 in unemployment compensation in 2020, all from the government. I am reporting my Form 1099-G in my 2020 tax return.
  • I received $5886 of student financial aid in 2020. This includes $1213 from a scholarship, $500 from a federal SEOG grant, $3173 from a federal pell grant, and $1000 from the College Access Program. For your information, the College Access Program is a grant administered by the Kentucky Higher Educ...
  • My earned income is not more than half of my living costs.
  • Here are the conditions of my custodial parent: She is single and divorced. She is alive. I live with her. No one else lives in our household. She is able to claim me as a dependent, but she will not do so in 2020 and she has never done so previously. She will not file taxes in 2020 and she did not file taxes in 2019 or 2018. She is unemployed. She is a monthly recipient of Supplemental Security Income (SSI) benefits. This is her only source of income. All of these conditions held true throughout the entirety of the years 2018, 2019, and 2020. All of these conditions still hold true today.
  • My conditions: I am employed part-time and will be reporting my Form W-2 in my 2020 tax return. In addition to the money I earn in wages, I am a monthly recipient of SSI benefits. All of these conditions held true in 2019 and 2020. All of these conditions still hold true today.

Technically, I do meet all of the criteria necessary to be subjected to the Kiddie Tax. Therefore, I would be required to provide the name, SS number, and income of my custodial parent. The problem, however, is that my custodial parent is a non-filer and therefore has no filing status. I am asked to classify her filing status as one of the following: Single, Head of Household, or Widower. None of these are applicable to her because, as previously stated, she is a non-filer and therefore has no filing status. All of her income in 2018, 2019, and 2020 came exclusively from Supplemental Security Income benefits, which is exempt from taxation and cannot be reported on a tax return. She does not file taxes because of this.

 

I tried filling out the information for the Kiddie Tax, and when the Kiddie Tax is factored into my tax return, I have over $400 in federal tax due. I believe this is a mistake, but I'm not sure. I need help figuring out whether or not I should, indeed, be subjected to the Kiddie Tax. I am seeking advice related to this issue on this forum. Also, I never received a stimulus check at all. I am not claimed as a dependent, I was laid off from my part-time job for roughly 2 months in 2020 due to COVID-19 and a lockdown imposed by my state's Governor, and I am a recipient of SSI which, according to the IRS, means I should automatically get the stimulus money. When I try to check my payment status on the IRS website, it says my payment status is not available. I made sure to enter my information correctly. For some reason, I am not being presented with the option to claim a Recovery Rebate Credit (RRC) in my tax return, even though I clearly indicated that I did NOT receive a stimulus. I wonder of the Kiddie Tax has anything to do with this. As previously stated, I am seeking advice related to this issue on this forum. All help is greatly appreciated. I firmly believe that I qualify for the stimulus, that it's a mistake that I never received it, and that I should be able to get an RRC. Keep in mind that this (the RRC) is the main issue. I included the Kiddie Tax in this because I wonder if it has anything to do with me not being able to get an RRC. However, I am more concerned about the RRC than the Kiddie Tax, so please keep that in mind.