Adult child dependent - not dependent - dependent again

[jobyboy]

I claimed my 24-years-old daughter as non-dependent for 2020 so she could get the first 2 stimulus payments. She also received her $1400 in 2021. Last year she was out of college and didn't have any W-2 or 1099 income, so I want to make her dependent again. When I did that, TT added $500 dependent credit and another $1400. I want to keep the $500 credit, but what do I do about the $1400? When I click on "?" in TT it says that these credits are not repayable. Is that so? Even when I am overpaid?

[SweetieJean]

The IRS rules must be followed.  If she was eligible to be your dependent in 2020, she should have stated that on her own return, whether you actually claimed her or not.

[jobyboy]

Of course she will state that she is dependent on her return. Since she has no income it won't change anything for her, but it changes things for me.

[Bsch4477]

Well, let’s take a step back. You wrote that you took your daughter as a non dependent so she could get the stimulus. Do you mean that she qualified to be your dependent but you elected not to claim her? If you qualified to claim her-even if you chose not to claim her-she should have clicked the box on her return saying that someone else can claim her. If she did that she would not have been given the stimulus. 

The answer to your question is that if you can claim her in 2021 you are entitled to the $1400 even though she received it as well. There is only a problem if you could have claimed her in 2020 in which case she filed an inaccurate return if she didn’t say on that return that someone else can claim her. 

[jobyboy]

In order to receive the stimulus payments, she could not check the box that someone else will claim her. She would not receive the payments. It was all done correctly for me and for her in 2020. Now I want to take her back as a dependent since that will give me an extra $500.

[Bsch4477]

I might not have been clear. If she could have been your dependent (even if you didn’t claim her) she by law had to say that someone else could claim her. And, yes, she would not have gotten the stimulus because by tax law, she should not have gotten it if , in fact, you could have claimed her.