EIC allowed for parent if 18 yr old filing his own taxes?

[Tajppt39]

I have 2 children that live with me that I usually claim as dependents and for EIC. (1 disabled adult son, and 1 now 18 yr old son) This year, I do not necessarily need to claim my 18 yr old son because my income is under "difficulty of care income". (it will be my first time filing with the excludable income). My 18 year old would like to file his own taxes without me claiming him as a dependent so that he can be eligible for the Recovery rebate (stimulus). (no dependent stimulus was received for him due to his age) So my question is, when I file my taxes and list dependents for EIC, do I just list my adult disabled son or can I list my 18 yr old son since he lived with me for 9 months before moving into his college dorm? I am thinking that I should not list the 18 yr old, but didnt want to miss a credit by not asking to be sure. Thanks

[xmasbaby0]

You will not get EIC for the 18 year old if you do not claim him as a dependent.  A whole bunch of teenagers and students want to be called "independent" so they can get stimulus money instead of being claimed on parents' returns.

The rule is if a person CAN be claimed then they have to say they can be claimed as a dependent on someone else's tax return.

Does your son meet the criteria to be your qualifying child or qualifying relative?  Pay particular attention to the age limits.

WHO CAN I CLAIM AS A DEPENDENT?

You can claim a child, relative, friend, fiance (etc.) as a dependent on your 2019 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?

[Tajppt39]

Thank you for the fast response. It makes sense that I would not be able to claim him for EIC if I dont claim him as a dependent. I didnt think I should, but thank you for verifying it. Can he still file his own taxes since he is now working and supporting himself in college?

[xmasbaby0]

MY DEPENDENT HAD A JOB

If your dependent has a W-2 for his after-school job, summer job, etc. you do not include the information on your own return. You can still claim your child as a dependent on your own return.  He/she can file his own return for a refund of some of his withheld wages (he won’t get back anything for Social Security or Medicare), but MUST indicate on it that he can be claimed as a dependent on someone else’s return.  (Supervise this closely or prepare it for him!)

If your dependent’s earnings were over $400 and were reported on a 1099Misc or 1099NEC then he must file a return and pay self-employment tax for Social Security and Medicare.  You may want to use this version of TT for that:

https://ttlc.intuit.com/questions/1900583-what-is-turbotax-free-file-program

[xmasbaby0]

@Tajppt39 And in case you are not aware----as long as your son is a full-time student you can claim him as a dependent until he is over 23 no matter how much he makes.  And YOU are the one who enters the education credits on your own tax return if he is your dependent.

https://ttlc.intuit.com/questions/1901172-what-are-education-tax-credits

https://ttlc.intuit.com/questions/1901172-what-education-tax-credits-are-available   

https://ttlc.intuit.com/questions/3262983-who-is-eligible-to-take-the-american-opportunity-tax-credi...

https://ttlc.intuit.com/questions/1899852-what-are-considered-qualified-education-expenses

https://ttlc.intuit.com/questions/2976047-what-are-examples-of-education-expenses

[Tajppt39]

Thank you. I dont need to claim him anymore. My income is no longer taxable under difficulty of care payments. That's why I was going to let him file himself. I no longer support him. He works and pays his own bills (insurance etc). He won a full ride private college scholarship that pays for his tuition, room and board. He buys his own books though. He was really hoping to be able to get the stimulus since he is trying to support himself, but I guess it is looking like he wont be able to. Thanks for all of your advice.

[AmeliesUncle]

It sounds like xmasbaby has you on track for your situation, but I just want to add a few clarifications for future readers:

1. There are circumstances where you CAN claim EIC if the child is not your dependent.  A child would not qualify as your dependent if they pay for over 1/2 of their own support.  But if that is the only reason whey they don't qualify as your "Qualifying Child", that would NOT disqualify you from claiming EIC based on that child.  You can also choose to not claim him as a dependent, and still qualify for EIC for him.
2. If a student can establish that they have PERMANENTLY moved out of the parent's home, that would mean they are not your dependent.  But that is uncommon with college students, unless perhaps they have their own private, permanent, year-around housing.
3. Even though your son is paying for his own expenses, it seems like he is NOT paying for over 1/2 of his own costs.  Scholarships are considered as being paid from a 3rd party, so once you factor in the high cost of college and housing (being paid for by scholarships), he is not paying for over 1/2 of his own support.

However, for your situation is more complicated due the college scholarships and educational credits.  The fact his full-ride scholarship is paying for housing means that portion of his scholarship is taxable.  He may even want to 'force' MORE to be taxable so you could qualify for a refundable educational credit.  Or if he owes taxes, you could choose to not claim him and then he could claim the non-refundable education credits to offset the tax he owes (he still can't claim himself though).  In many cases a child with this type of scholarship could be subject to the "Kiddie Tax", but because your income is so low that isn't a problem.  As you see, it can get quite complicated, so you and your son may want to go to a tax professional to figure out the best way for each of you to file.

[Hal_Al]

Difficulty of care payments are now eligible for EIC, even though they are not taxable.  

See https://ttlc.intuit.com/community/tax-credits-deductions/discussion/re-do-i-qualify-for-eic-if-i-had...

[Tajppt39]

Thanks for the info. This is sounding more complicated now with the scholarships and education credits. Although I have always done my very simple taxes myself, I am thinking it may be time to find a tax preparer this year. I want to make sure I file everything correctly.