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Level 2
March 23, 2021
Solved

Is unemployment paid to s dependent student? taxable

  • March 23, 2021
  • 3 replies
  • 47 views

Dependent child was 22 years old, a full-time student in 2020, and will be claimed as a dependent on parents' federal and state returns.  Dependent earned $8600 from a part-time child care job and was paid an additional $8500 in state unemployment benefits when child care center was closed because of Covid-19. Parents' taxable income was approximately $175,000. Is the student's unemployment income exempt because it was less than $10,200, or is it taxable?

Best answer by DMarkM1

Since the AGI on his return is below 150,000, the unemployment less than 10,200 will be excluded from income.  TurboTax online products have been updated to include this new provision.  TurboTax desktop products are being updated.  

3 replies

DMarkM1
DMarkM1Answer
Alumni - Intuit
March 23, 2021

Since the AGI on his return is below 150,000, the unemployment less than 10,200 will be excluded from income.  TurboTax online products have been updated to include this new provision.  TurboTax desktop products are being updated.  

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RKahaneAuthor
Level 2
March 23, 2021

So the parents' income is irrelevant, even though the student is their dependent?

DMarkM1
Alumni - Intuit
March 24, 2021

You are correct.  The limiting factor is the AGI on the tax return with the unemployment benefits (dependent's).  

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