Dependent Confusion

[sabugs]

Hello,

For 2018 and 2019, I believed my parents were claiming me as a dependent, as they were paying for my health care and occasionally helping me with rent payments and other miscellaneous costs. I was a college student in 2018 and 2019.

However, after recently talking with my father, I found they have not claimed me as a dependent since 2016. So my tax forms are marked saying "someone can claim me as a dependent", but no one ever claimed me.

My main concern is this-- because I said I could be claimed as a dependent, will I be ineligible for the COVID-19 stimulus check? And if so, how would I fix it?

[AlanT222]

Most likely you will not be eligible.  Please go to https://www.irs.gov/coronavirus-tax-relief-and-economic-impact-payments to determine your eligibility. 

[macuser_22]

There are 2 questions - *can* you be claimed and were you actually claimed.   Either way you are treated as a dependent and cannot claim yourself.  The only difference is certain educational credits that would be claimed by the pared can be claimed by you if not actually claimed by the parent.

[sabugs]

Thank you for the information. How would I fix my taxes so I could claim the check, as I was never actually claimed?

[sabugs]

I could not have been claimed, as I was supporting myself, and my parents never claimed me. However, I mistakenly believed I could be claimed. 

[macuser_22]

You would have to amend to change it.  That "might" give you and additional refund, however it will not help now because amended returns take about 4 months to process.

Amended returns can only be mailed. It is suggested that it be mailed certified with return receipt (or other tracking service) to verify that the IRS receives it.

See this TurboTax FAQ for detailed amend instructions:
https://ttlc.intuit.com/questions/1894381-how-to-amend-change-or-correct-a-return-you-already-filed


You can check the status of the amended return here, but allow 3 weeks after mailing.

https://www.irs.gov/filing/wheres-my-amended-return

[sabugs]

Thank you so much! Would I need to amend my 2018 return also, since that is taken into account for the stimulus check eligibility?

[Hal_Al]

You will probably not get the stimulus in 2020 (for 2019), but will in 2021.  

"In essence, the stimulus check acts as an advance of your 2020 income tax refund. This means when you prepare your 2020 income tax return, there will be a line to include the section 6428 credit. The credit on your 2020 return is subtracted by any amount received as a stimulus check in 2020. If the amount you received as a stimulus check is less than the credit you are due, the difference will be included as part of your 2020 refund. If you have been overpaid by receiving the stimulus check, however, you will not be required to return any excess amount".

Reference: https://www.dailylocal.com/news/coronavirus/what-does-the-stimulus-check-mean-for-your-taxes/article...

_________________________________________________________________________

A bigger issue is who should be filing amended returns for 2017, 2018 and 2019,  you or your parents.  The first issue is CAN you parents claim you (and why didn't they).  

A child of a taxpayer can still be a “Qualifying Child” (QC) dependent, regardless of his/her income, if:

1. He is under age 19, or under 24 if a full time student (including high school) for at least 5 months of the year, or is totally & permanently disabled
2. He did not provide more than 1/2 his own support. Scholarships are considered third party support and not as support provided by the student.
3. He lived with the parent (including temporary absences such as away at school) for more than half the year

So, it doesn't matter how much he earned. What matters is how much he spent on support. Money he put into savings does not count as support he spent on him self.

The support value of the home, provided by the parent, is the fair market rental value of the home plus utilities & other expenses divided by the number of occupants.

Furthermore, there is a rule that says IF somebody else CAN claim him as a dependent, he is not allowed to claim himself. If he has sufficient income (usually more than $12,200, $6350 in 2017), he can & should still file taxes. In TurboTax, he indicates that somebody else can claim him as a dependent, at the personal information section.  TT will check that box on form 1040.

With the tax law change, effective 2018, most students will get the same refund whether they claim themselves or not. The personal exemption has been eliminated and the standard deduction increased.

Full dependent rules at 

https://turbotax.intuit.com/tax-tools/tax-tips/Family/Rules-for-Claiming-a-Dependent-on-Your-Tax-Ret...

[sabugs]

Interesting-- thank you so much for the detailed reply!

I was a full time student in 2018, and part time in 2019. I am under 24. I earned less than 12,200 during that time. So I suppose my parents could have claimed me, but they decided not to because they were not providing more than half of the income I needed to support myself. I did receive a decent amount of scholarships, but those all went toward tuition, and not daily living expenses. I also did not live with my parents the majority of 2018 or 2019.

Would this mean I was correct in claiming I was a QC, and my parents just didn't claim me?

[macuser_22]

---

@sabugs wrote:

Interesting-- thank you so much for the detailed reply!

I was a full time student in 2018, and part time in 2019. I am under 24. I earned less than 12,200 during that time. So I suppose my parents could have claimed me, but they decided not to because they were not providing more than half of the income I needed to support myself. I did receive a decent amount of scholarships, but those all went toward tuition, and not daily living expenses. I also did not live with my parents the majority of 2018 or 2019.

Would this mean I was correct in claiming I was a QC, and my parents just didn't claim me?

---

It sounds like you filed correctly.

Your parents were mistaken that they have to provide more than half of your support - that has not been the law for years.  The current law is that *you* cannot provide more then half of your *own* support - it makes no difference where the support comes from as long as *you* did not provide it.    You could make a million dollars and put it all in a bank and none of it would be support and you parents could still claim you.  Being away form home to attend school counts as time lived at home.

Perhaps it is your parents that should amend and claim you for additional credits that they did not claim.   See the support worksheet below.

---Tests To Be a Qualifying Child---
(Must pass ALL of these tests)

NOTE: If a child passes all of these tests he must say “yes” on his/her own tax return (if he/she files one) that another taxpayer CAN claim him/her as a dependent even if they DO NOT claim him/her)

1. The child must be your son, daughter, stepchild, foster child, brother, sister, half brother, half sister, stepbrother,stepsister, or a descendant of any of them.

2. The child must be (a) under age 19 at the end of 2018, (b) under age 24 at the end of 2019 and a full-time student* for any part of 5 months of 2019, or (c) any age if permanently and totally disabled and must be younger than you (or your spouse if filing jointly).

3. The child must have lived with you for more than half of the year (There are exceptions for temporary absences such as school, illness, business, vacation, military service).

4. The child must not have provided more than half of his or her own support for the year.
See Worksheet 3-1. Worksheet for Determining Support
https://www.irs.gov/publications/p17#en_US_2019_publink1000171012

5. If the child meets the rules to be a qualifying child of more than one person, you must be the person entitled to claim the child as a qualifying child.

6. The child is not filing a joint return.

7. The child must be a U.S. citizen, U.S. resident alien, U.S. national, or a resident of Canada or Mexico

*A full-time student is a student who is enrolled for the number of hours or courses the school considers to be full-time attendance during some part of each of any 5 calendar months of the year.

See IRS Publication 17 for more information.

https://www.irs.gov/publications/p17

[sabugs]

• I'm just going to list these by number for clarity--

1. Pass

2. Pass

3. Fail? (lived in a different city than parents, even when I was not attending classes, such as over the summer)

4. Fail? (provided over half my own support, but I don't know where tuition and student loans come into play with this)

5. Not applicable (only one person can claim me)

6. Pass

7. Pass

Since I passed some and failed others, does that mean it is optional if I mark myself as a QC or not? I see that it says I *must* claim myself if I pass all of these conditions, but I'm unsure what to do if some pass and others don't.

[macuser_22]

Student loans in your name count as support that your provide.

If you permanently moved out of your parents home and did, in fact, support your self then you cannot be a dependent.

[sabugs]

I had a mix of student loans in my name, as well as a variety of scholarships and grants. I could do more research on the ratio between the two.

I have been in student housing and apartments and moved intermittently, some periods of time at home and other stretches living in the other city for school.

Thank you so much for your time-- I know my case has a lot of nuances.

[Hal_Al]

"I did receive a decent amount of scholarships".   "Variety of scholarships and grants". 

Scholarships and grants are third party support and do not count as support provided by you, for the support test. 

"Lived in a different city than parents, even when I was not attending classes, such as over the summer" ,

This is still a little "iffy".  If the "different city" is where the college is and your primary purpose for being there is school, you can still be considered as living with your parents at your/their "permanent" residence. "I have been in student housing and apartments and moved intermittently, some periods of time at home and other stretches living in the other city for school" favors that position.

"I was a full time student in 2018, and part time in 2019". 

If you were not full time for parts of at least five months (e.g. Jan-May), you cannot be their qualifying child dependent. For 2019, there is an income test (and a different support test). 

There are two types of dependents. 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 OR live with the taxpayer ALL year  
2. His/her gross taxable income for the year must be less than $4200 ($4150 in 2018)
3. The taxpayer must have provided more than 1/2 his support

In either case:

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