Can I claim a dependent in California return for daughter who is not claimed as a dependent in my federal return

[kevinlee763]

I have a daughter who is qualified as a dependent for my federal tax return. But I decide not to include her so that she can claim the education credit in her independent tax filing. That is for the Federal return. Now, I am a bit puzzled in the state (California) return in this case. During the federal return QA in TurboTax, she answered No to the question if someone else (in this case "me") will claim her as a dependent. So, it is aligned. However, differently from the federal, state return QA doesn't ask the same question. We assumed California may not need that information or TurboTax simply carries over federal answer to state. We don't know what is going on in the Turbotax background logic. Without knowing the logic, I followed my CA QA guideline in my return to include her as a dependent for California return even if I didn't include her for my federal dependent. Is this an error or allowed even if my daughter claimed no one will claim her as a dependent in her federal return?

[ColeenD3 · Accepted solution]

You have the choice not to claim her but she does not have the choice to file as independent. There is another question that needs to be answered in Personal Info, "Someone else can claim me as a dependent on their tax return". If she is a Qualifying Child or Qualifying Relative, she does not have the right to claim benefits that can only go to a nondependent.

Qualifying Child

Relationship — the taxpayer’s child or stepchild (whether by blood or adoption), foster child, sibling or step-sibling, or a descendant of one of these.

Residence — has the same principal residence as the taxpayer for more than half the tax year. Exceptions apply, in certain cases, for children of divorced or separated parents, kidnapped children, temporary absences, and for children who were born or died during the year.

Age — must be under the age of 19 at the end of the tax year, or under the age of 24 if a full-time student for at least five months of the year, or be permanently and totally disabled at any time during the year.

Support — did not provide more than one-half of his/her own support for the year.

Qualifying Relative

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

• You provided more than half of their financial support. More info
• They made less than $4,300 in gross income during 2020 unless they are a qualifying child.
• They live with you or they are related to you. (Your relative must live at your residence all year or be on the list of “relatives who do not live with you” in Publication 501.) 
• They are a U.S. citizen, resident alien, national, or a Canadian or Mexican resident.
• They aren't (or won't be) claimed as a dependent by someone else.
• They aren’t filing a joint return with their spouse.
• You are not being claimed as a dependent on someone else's return.

[kevinlee763]

Many thanks for your answer. This clarifies how to handle my daughter as dependent or non-dependent subject to Qualifying Child for the Federal Tax case. How about for California return? Should I use the same definition of Qualifying Child for California state return?

[DMarkM1]

Yes,  CA follows the federal law for dependent qualifications.