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dylvalencia
New Member

I have 18 and a 20 yr olds what are the benefits of keeping them as dependents and are there better benefits for them to file on their own. Thanks!

 
3 Replies
xmasbaby0
Level 15

I have 18 and a 20 yr olds what are the benefits of keeping them as dependents and are there better benefits for them to file on their own. Thanks!

It is not a choice.    If they meet the criteria to be claimed as dependents then they have to say on their own tax returns that they can be claimed---even if you do not claim them.   The 18 year old can still be claimed as a qualifying child.  The 20 year old *might*  be a qualifying child  IF he is a full-time student.   If the 20 year old is not a full-time student then he might not be a qualifying relative dependent if he had over $4300 of his own income for 2020.   If the 20 year old is not a dependent then he can get the recovery rebate credit and receive the 1st and/or 2nd EIP payments, and later on, the 3rd stimulus payment.

 

Read the criteria for claiming a dependent carefully and use the IRS tool to determine whether they can be claimed as your dependents.

 

WHO CAN I CLAIM AS A DEPENDENT?

 

You can claim a child, relative, friend, fiance (etc.) as a dependent on your 2020 taxes as long as they meet the following requirements:

Qualifying child

•They are related to you.

•They cannot be claimed as a dependent by someone else.

•They are a U.S. citizen, resident alien, national, or a Canadian or   Mexican resident.

•They are not filing a joint return with their spouse.

•They are under the age of 19 (or 24 for full-time students).

    • No age limit for permanently and totally disabled children

        They live with you for more than half the year (exceptions apply).

Qualifying relative

•They don't have to be related to you (despite the name).

•They cannot be claimed as a dependent by someone else.

•They are a U.S. citizen, resident alien, national, or a Canadian or Mexican resident.

•They are not filing a joint return with their spouse.

They lived with you the entire year.

•They made less than $4300  (not counting Social Security)

•You provided more than half of their financial support. More info

When you add someone as a dependent, we'll ask a series of questions to make sure you can claim them.

Related Information:

Does a dependent have to live with me?

What does "financially support another person" mean?

Can I claim a newborn baby?

 

IRS interview to help determine who can be claimed:

https://www.irs.gov/help/ita/who-can-i-claim-as-a-dependent

 

For your 18 and 20 year olds:

 

https://ttlc.intuit.com/community/dependents/help/when-do-i-have-to-answer-yes-to-being-claimed-as-a...

 

 

If you claim them as your dependents----they are both too old for you to get the child tax credit.   But you get the $500 credit for other dependents for each one, and the 3rd stimulus payment for claiming each of them (if you are otherwise eligible to get the EIP payment).   You  may also get earned income credit for claiming a qualifying child dependent if your income earned from working makes you eligible for the EIC.  And of course you can enter any medical expenses paid for them on your tax return if you itemize deductions.  If they are full-time students then you are the one who gets the education credits on your own tax return.

**Disclaimer: Every effort has been made to offer the most correct information possible. The poster disclaims any legal responsibility for the accuracy of the information that is contained in this post.**
VolvoGirl
Level 15

I have 18 and a 20 yr olds what are the benefits of keeping them as dependents and are there better benefits for them to file on their own. Thanks!

Even if you claim them as a dependent they might still need to file their own tax return.  Be sure on their return they check the box that says they can be claimed on someone else’s return.  If their only income is W2 and under 12,400 they do not have to file a return except to get back any withholding taken out.

 

Filing requirements for a dependent

https://ttlc.intuit.com/community/children-dependents/help/do-i-need-to-file-my-own-taxes-if-i-m-a-

dependent/00/26111

 

If one is under 19 on December 31 you can claim them no matter how much they made.  But if they are 19 or older you can only claim them if they were a full time student or made less than 4,200 total for the year.

 

Opus 17
Level 15

I have 18 and a 20 yr olds what are the benefits of keeping them as dependents and are there better benefits for them to file on their own. Thanks!

Well, it's a semi-choice.  You don't have to claim dependents, but your dependents must say "Yes, I can be claimed as a dependent" if they can be claimed, even if you aren't going to claim them.  

 

First, a child must always file a return in their own name to report income earned from working.  (Sometimes if the child's only income is from investments, the income can be added to the parent's return.)  The child will be asked "Can you be claimed as a dependent on someone else's tax return?"  The child must answer "yes" if they can be claimed, even if the person who could claim them doesn't want to claim them.  If the child answers "NO", that they can't be claimed, when they could be, that could be considered tax fraud. 

 

There is a second question, "Will the person who could claim you, actually claim you this year?"  This question only affects the child's eligibility for the American Opportunity Credit.  In some cases (usually where the parent has a very high income) the child will get a larger AOTC than the parent, if the parent who could claim them, does not claim them.

 

For an 18 year child, if they live at home, they must answer "yes someone else can claim me", unless they provided more than half their total financial support.  

 

For a 19 year old child, they will answer "yes, someone can claim me" if one of these two situations is true:

a. They are a full-time student, and don't provide more than half their own support.

b. You provide more than half their support and they have less than $4300 of taxable income.

 

If their income is too high and they are not a student, or they are a student but they pay more than half their own way, they can't be claimed as dependents.

 

As far as benefits,

For 2021 only, if you claim the children as dependents, you will get a $500 "other dependent" credit and a $1400 stimulus rebate for each child, unless you already got the $1400 stimulus check.

 

If the child answers "no one else can claim me as a dependent", they will get a $1400 stimulus rebate in their own name, even if you previously got a check for them.  However, if they answer no just to get the $1400, that would be tax fraud, and the IRS has 6 years to audit them. 

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*

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