21 year old full time student & recovery credit

[sandhya]

Hi, I am 21 year old full time student. I had summer job income of $8010 and my parent support me for all my educational expenses. Do I qualify for recovery rebate credit?

Thanks,

Sandhya

[Hal_Al]

No.  You do not qualify for the recovery rebate  credit (Stimulus) if you can be claimed as a dependent.

Under the CARES Act, if you are claimed, or qualify to be claimed, as a dependent on someone else’s 2019 return you cannot receive a stimulus check, in 2020.   If you qualified as a dependent for 2019, but will not be for 2020, you will most likely get it in 2021, when you file a 2020 tax return.

Note that the requirement is not just whether you are actually claimed as a dependent, it's whether you qualify to be claimed as a dependent. 

[Bsch4477]

From your post I assume that you are eligible to be claimed as a dependent so you would not receive any stimulus payments. 

[sandhya]

That is what I had thought but TurboTax came up with the credit. What might be wrong or how do I change it? Should I change and file a amendment? Thanks.

[sandhya]

Also, I wanted to invest my earnings into an IRA so was filing my return as independent.

[Hal_Al]

You do not have  to be an "independent" to make a contribution to an IRA.  You only need to have earned income.  Dependents, with earned income ("taxable compensation") may contribute to an IRA.

[Bsch4477]

That’s your answer. Since you CAN be claimed as a dependent—even if you are not actually claimed—you must check the box in your personal information that you can be claimed by someone else. Then you will not receive the stimulus. 

[sandhya]

So if I understand following needs to happen.

1. I have to amend my tax return and use the option "I can be claimed as a dependent"

2. Then my parents can use me as a dependent in their taxes.

3. In that case should I still need to file if my parents are going to claim me as dependent?

Thanks much!

[VolvoGirl · Accepted solution]

#1.  Yes you have to amend if you filed and it was Accepted or you mailed it.  Wait for the original return to process and you get the first refund.

#2 Yes your parents can (whether they do or not) claim you as a dependent.  If they try to claim you their efile should reject and they will have to print and mail their return this year.

#3 Did you get a W2 or 1099NEC for your income?  You don't have to file if you only got W2 under 12,400 except to get back any withholding taken out.  If you got a 1099NEC or 1099Misc you fo have to file.

[sandhya]

Thank you so much for such complete answers. Just one clarification:

I should not file an amendment till I get the refund, correct?

For 3. I did get a 1099 and there was some Fed. tax withheld so I do need to get that refunded. 

Meanwhile, my parents have not yet filed their taxes. They filed an extension. Can they file theirs now or should also wait for my amendment to go through?

Thanks

[VolvoGirl]

What kind of 1099 did you get?  1099G, 1099R, 1099Misc etc.

Your parents can file now but they will have to print and mail their return this year (even if they wait for your amended return to be processed).

[sandhya]

Sorry, wrote that wrong. I got a W-2.  Also could you explain why my parents have to print the return and cannot do it online?

Thanks,

[VolvoGirl]

Oh let's back up a bit.  Did you already file a return?  Did you claim yourself or file saying you are a dependent?  Or do you need to actually amend it or just fix your return before you file for the first time?

[sandhya]

 I have already filed as not dependent. I need to amend it to be filed as "can be dependent". I have a W-2 and my income is $8010. I am a full time student. 

So my questions are:

1. Do I wait to do the amendment till the current one I filed is accepted?

2. Should my parents wait till my amended tax form is all accepted?

3. Or they can file using me as a dependent? Currently they have filed extension and plan to finish their returns in next few weeks.

Thanks,

Sandhya