Can I claim my grandmother as dependent on 2021 tax returns if she got all 3 stimulus checks

[Alisa51]

Hello, 

I’m going to claim my grandmother as my dependent on my 2021 tax return. But she got all 3 stimulus checks (3rd one included) because that time I’m not planning to claim her as my dependent. She doesn’t receive any social security benefits, she never filed taxes since her income is 0. IRS sent her stimulus money based on info we submitted if I’m not mistaken on form 1040-SR. I’m using TurboTax basic and once I put her info on my dependent section system asked me what amount I received based on letter 6475 (total -$ 1400 in my case) based on this I’m eligible to receive extra $1400 since she is my dependent. Is it still ok to claim her as dependent and do I need to help her to file her own tax return to show IRS she has no income? Please advise on possible scenarios in this case. Thanks.

[Hal_Al]

Yes, you can claim her as a dependent, on your 2021 tax return.  Her having received the 3 stimulus payments does not prevent you from claiming her.  Doing so gets you the $1400 Recover Rebate Credit and she does not have to pay back the $1400 she already got.

No, she does not need to file her own tax return to show IRS she has no income.

That, of course,  that assumes she qualifies as your dependent.  

There are two types of dependents, "Qualifying Children"(QC) and Other ("Qualifying Relative" in IRS parlance even though they don't have to actually be related). There is no income limit for a QC but there is an age limit and student status test, a relationship test and a residence test. Only a QC qualifies a taxpayer for the Earned Income Credit and the Child Tax Credit. The Other dependent (qualifying relative) credit is worth (up to) $500 per dependent and is non-refundable.  That is, it can only be used to reduce an actual tax liability.

A person can still be a Qualifying relative dependent, if not a Qualifying Child, if he meets the 6 tests for claiming a dependent:

1. Closely Related (grandparent qualifies) OR live with the taxpayer ALL year
2. His/her gross taxable income for the year must be less than $4300 (2021).
3. The taxpayer must have provided more than 1/2 his support*
4. He must be a US citizen or resident of the US, Canada or Mexico
5. He must not file a joint return with his spouse or be claiming a dependent of his own
6. He must not be the qualifying child of another taxpayer

She must have a US social security number or tax identification number (TIN)

 If no one person (or married couple) provides 50% of the support (for example your siblings are also sending support), then a "multiple support agreement” (IRS Form 2120) can be used, to allow you to claim the dependent. https://www.irs.gov/pub/irs-pdf/f2120.pdf

The IRS has a worksheet that can be used to help with the support calculation. See: http://apps.irs.gov/app/vita/content/globalmedia/teacher/worksheet_for_determining_support_4012.pdf The support value of a home is the fair market rental value, divided by the number of occupants.

IRS Publication 501 on page 16 has a worksheet http://www.irs.gov/pub/irs-pdf/p501.pdf

https://apps.irs.gov/app/vita/content/globalmedia/tables_1_2_4012.pdf 

https://ttlc.intuit.com/questions/1894472-who-is-a-dependent

[Alisa51]

Thank you 

I’m just thinking about future nationalization process, is it probably a way to show USCIS her tax returns (even with 0 income) as a proof of her permanent residency (she visits her country of birth quite often). Is it makes sense?