topic Dependents in Deductions & credits

Dependents

hlandesberg — Mon, 15 Mar 2021 17:52:44 GMT

Why does Turbotax ask if you can be claimed as dependent by someone else - and if that person will claim you as a dependent? Does this mean that a parent has the choice of whether or not to claim a child as a dependent? If the answer to that question is yes - that a parent does not need to claim a child as a dependent - then what are the tax consequences for the child? Would this change the deductions that could apply to the child's tax return?

Re: Dependents

xmasbaby0 — Mon, 15 Mar 2021 18:13:31 GMT

https://ttlc.intuit.com/community/dependents/help/when-do-i-have-to-answer-yes-to-being-claimed-as-a-dependent/00/1994319

Re: Dependents

hlandesberg — Mon, 15 Mar 2021 18:19:12 GMT

Thank you for the link, but it doesn't really answer my questions.

Is a parent required to claim a dependent on their return if the child meets the criteria for being a dependent? Why does Turbotax ask both "can someone claim you" and "will they claim you?"

If a parent is not required to claim a dependent and if the child would answer "yes a parent could claim me as a dependent" but "no, they will not claim me as a dependent" - what is the impact on the child's tax return?

Re: Dependents

macuser_22 — Mon, 15 Mar 2021 18:22:51 GMT

Nothing requires a parent to claim a dependent, but if they CAN claim the dependent then the person cannot claim them-self - tax law does not allow that. That is why there are two questions "CAN you be claimed by another tax payer?, and WERE you claimed?

Yes to the first means you cannot claim yourself, no to the second might allow you to claim certain educational credits that usually only the person claiming you could claim.

Re: Dependents

xmasbaby0 — Mon, 15 Mar 2021 18:25:27 GMT

NO parents are not required to claim a dependent. However, the rule is if you CAN be claimed as a dependent you are supposed to say on your own return that you can be claimed--regardless of whether the person who can claim you will do so. If you can be claimed as a dependent you are not eligible for education credits, stimulus checks, etc. A dependent cannot claim a dependent of his/her own. Dependents may have a lower standard deduction:

The standard deduction amount for an individual who may be claimed as a dependent by another taxpayer cannot exceed the greater of $1,100 or the sum of $350 and the individual’s earned income (not to exceed the regular standard deduction amount).

If you can be claimed as a dependent and you received "unearned" income such as investment income or unemployment income, you may be subject to the "kiddie tax."

https://ttlc.intuit.com/questions/1900671-what-is-the-kiddie-tax