My 23 year old son was in college for the first 5 months in 2020 and did not provide >50% of expenses from earned income. He did, however, inherit an IRA from an uncle who passed away and took a $12,400 distribution from it. Later in the year, he earned $6300 from a job.
I believe he qualifies as my dependent but this puts him in line to pay the 'kiddie tax' on the income over his $12,400 personal deduction limit if I claim him as a dependent, which I believe I can. However, his tax bill on the $6300 will be a bit over $2000 while I'd get a $500 deduction. Can I choose NOT to claim him as a dependent even though I believe he qualifies? By answering on his tax form that he can be claimed but won't be claimed, his $2000 tax bill becomes a $500 refund. So as a family, we're $2000 to the good if I don't claim him as a dependent. Can I do this? And if yes, what do I need to do on my return to have him not listed as a dependent? As soon as I answer that he did not pay for >50% of his expenses it defaults to him being my dependent.
