Dependent Education expenses

My daughter is a fulltime student.  I claim her a dependent.  I also entered her expenses on 1098T and income fro 1099Q's on my return.  I have already filed

 

I'm doing her tax return. Am I correct in assuming I cannot enter the education info and expenses in her return?

She got COVID unemployment and is really being hit because my income is too high

 

Suggestions?

Deductions & credits

The last stimulus bill passed a  $10,200 unemployment tax break for those that drew unemployment which may affect her return.  If you are using the desktop program instead of online, you may have to wait for the software update (currently planned for March 25th from what I heard).  

 

~ Amy ~
DMarkM1
Employee Tax Expert

Deductions & credits

For the question on entering 1098T information for your daughter, yes, you do enter the information on her return as well.  She will not get the education credits, but any qualifying education expenses can be entered to help reduce any excess scholarship income. Great observation from @KatValek on the new unemployment exclusion.  

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Deductions & credits

I haven't seen an update as of  5PM EDT.

 

Everything I've read refers to Single and Married people being able to exempt the first 10,200 (each) from unemployment compensation.

 

Nothing speaks to whether this is available as a dependent.

Deductions & credits

You should be able to enter information for your daughter on her return.  Dependents are eligible for the third stimulus payment.  For those who haven't filed yet, the IRS will provide a worksheet for paper filers and work with software industry to update current tax software to address concerns regarding issues like yours.  If you do not see an update then you should wait and try again in a few days.  TurboTax is developing the software required to process all of the new conditions.

Here is a TurboTax article about the American Rescue Plan.

 

@glake

Deductions & credits

to be clear on the response, you HAVE TO enter HER unemployment income on HER return.  The desktop version has not yet been undated to reflect the $10,200 exclusion.

 

on her education expenses, there is no 'double dipping' permitted.  you can NOT claim the same expenses on your return and then claim them again on her return.

 

and to clarify that 'dependents are eligible for the 3rd stimulus'.   technically, the TAXPAYER is able to receive stimulus payments for their dependents for the 3rd stimulus.  The dependent themselves are not eligible to receive any money. 

 

there just seems to be a lot of questions in this thread and it may not be clear what response is going with which question. 

View solution in original post

Deductions & credits

Understood on both points

 

I knew she was not eligible....I was DQ'd because of income limits

 

Thanks for the help

 

Deductions & credits

The update this AM did exempt 10,200 from my daughter's unemployment income.

Thanks for the heads up.  I had no idea about the change made with latest stimulus. 

Looks like state of MA may be doing same/similar, so my son may be getting a few bucks back too cause he already filed and paid the tax on some unemployment he collected (both kids lost jobs when COVID hit)

Deductions & credits

Yes, the State of MA will be following the Federal mandate regarding exempting the first $10,200 of unemployment benefits:

 

 

Sections 2101-2116 of the Act provide for an emergency expansion of unemployment benefits. Section 2102 temporarily extends benefits to individuals who are not otherwise eligible for state and federal unemployment benefits or who are unable to work as a direct result of the COVID-19 public health emergency, including self-employed individuals, independent contractors, and those with a limited work history.  Under sections 2102, 2104 and 2107, all recipients of state-paid unemployment compensation, including those who have otherwise exhausted the benefits they were entitled to under state or federal law, and those temporarily eligible under section 2102 of the Act, may collect unemployment compensation for a maximum of 39 weeks instead of the usual 26 weeks between January 27, 2020 and December 31, 2020.[6] Additionally, any unemployment compensation received between April 5, 2020 and July 31, 2020 will include a $600 per week increase under section 2104 of the Act.

Under the 2005 Code (and under current Code), federal gross income includes unemployment compensation.[7]  No provision of the Act excludes these payments from federal gross income.  Therefore, all payments of unemployment compensation, including amounts authorized under the Act, are includable in both federal and Massachusetts gross income and subject to Massachusetts personal income tax.

 

Here is the link for the full text. 

@glake