Dependent

[Plainsman65]

My grandson, age 22, worked most of 2020 and enrolled in graduate school in August.  I paid over half his living expenses.  Must he state that he can be claimed by another even if I do not claim him?  Obviously this is key to whether or not he receives stimulus payments.

[ColeenD3]

You are not required to claim a dependent. If he meets the qualifications for someone else, they could be allowed to claim him. See the two types of qualifications below.

Qualifying Child

Relationship — the taxpayer’s child or stepchild (whether by blood or adoption), foster child, sibling or step-sibling, or a descendant of one of these.

Residence — has the same principal residence as the taxpayer for more than half the tax year. Exceptions apply, in certain cases, for children of divorced or separated parents, kidnapped children, temporary absences, and for children who were born or died during the year.

Age — must be under the age of 19 at the end of the tax year, or under the age of 24 if a full-time student for at least five months of the year, or be permanently and totally disabled at any time during the year.

Support — did not provide more than one-half of his/her own support for the year.

Qualifying Relative

You can claim a child, relative, friend, fiancé (etc.) as a dependent on your 2020 taxes as long as they meet all of the following requirements :

• You provided more than half of their financial support. More info
• They made less than $4,300 in gross income during 2020 unless they are a qualifying child.
• They live with you or they are related to you. (Your relative must live at your residence all year or be on the list of “relatives who do not live with you” in Publication 501.) 
• They are a U.S. citizen, resident alien, national, or a Canadian or Mexican resident.
• They aren't (or won't be) claimed as a dependent by someone else.
• They aren’t filing a joint return with their spouse.
• You are not being claimed as a dependent on someone else's return.

[Hal_Al · Accepted solution]

Yes, he MUST  state that he can be claimed by another person even if you do not claim him.

If you (or anyone else) CAN claim him, as a dependent, he is not allowed to claim the stimulus payment. 

Are you sure you paid over half his expenses, including grad school expenses.  You don't say where he lives. 

There are two types of dependents, "Qualifying Children"(QC) and standard ("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, student status, a relationship test and residence test. Only a QC qualifies a taxpayer for the Earned Income Credit and the Child Tax Credit. They are interrelated but the rules are different for each.

The support test is different for each type. The support test, for a QC, is only that the child didn't provide more than half his own support. The support test for a Qualifying Relative is that the taxpayer provided more than half the relative's support.

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

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

Scholarships are third party support (neither support provided by the student or by you). Loans are support provided by the student unless you or the parent co-signed. 

[Opus 17]

If your grandson can be claimed as a dependent, regardless of who could claim him, he must check the box that says he can be claimed, even if he does not want to be claimed and even if the other person agrees not to claim him. This will disqualify him from the stimulus credit. If he fails to check the box in order to get a payment, that would be considered tax fraud.

Whether or not he can be claimed depends on his living arrangements and his sources of support.  You may need to actually add up all of the costs that you paid, and all of the costs he provided for himself to make sure you get the correct answer for your situation.

[ColeenD3]

There are two questions in the program that relate to these new comments. Please see the screen shot below.

[Opus 17]

Yes. The second question only applies to the American opportunity tax credit.  In some circumstances, a student who can be claimed as a dependent but is not claimed, can qualify for AOTC, and if the parent‘s income is too high to qualify for the AOTC, this can be to the overall benefit of the student and their family.  I am not aware of any other tax situation to which the second question applies.

The first question is by far the most important. If the taxpayer can be claimed as a dependent, they must say yes, even if the person who could claim them won’t. And for 2020, saying yes that they can be claimed, will disqualify them from the recovery rebate.

[anitaaustin]

My son, who is over 17, was not a full time student this year so I entered that I didn't have dependents. That changed my filing status to single from head of household. Then, when he qualified for the tax credit, I entered for the tax credit but didn't realize that would show him as a dependent.   Then when we submitted his tax return it was rejected because it said I claimed him as a dependent. Now I can't modify my return until it gets processed.

Turbo tax should have flagged that I marked no dependents when I marked for the tax credit. And possibly had me change my filing status back to head of household.

The issue is that I owe a ton in taxes and now my son won't get the stimulus check.  

I marked not to take the money I own from my account until 4/10/21 and don't know if I need to wait till then to refile my taxes so my son can refile his. Or if I can just do it after the Feds process my forms but not the payment.

What a royal pain that could have been avoided if Turbo Tax would have flagged that issue or advised to change my filing status.

[JamesG1]

If you have e-filed your 2020 Federal tax return and the tax return is accepted by the IRS, you may want to amend your 2020 Federal tax return and change the entries to allow you to not claim your son as a dependent.  Amended tax returns will not be available until March.

If you elect this choice, it sounds like you may be paying back some or all of the refund that you receive.

If you have e-filed your 2020 Federal tax return and the tax return is rejected by the IRS, you will be able to change your entries, not claim your son as a dependent as well as correct the entries that generated the rejection.

You may qualify for Head of Household filing status if you:

1. Were unmarried as of December 31, 2020 and
2. Paid more than half the cost of keeping up your home during the tax year (rent, mortgage, utilities, etc.), and
3. Supported a qualifying person.

If you were legally married as of December 31, 2020 and a child lives with you, you may qualify for Head of Household filing status if:

1. You won't be filing jointly with your spouse,
2. Your spouse did not live in your home after June,
3. Your home was your child's, stepchild's, or foster child's main home for more than half the year,
4. You paid more than half the costs of keeping up your home during the tax year
5. You meet the qualifications to claim the child as your dependent, even if the other (noncustodial) parent is actually claiming the child as a dependent on their return

For purposes of qualifying for the Head of Household filing status, a qualifying person is a child, parent or relative who meets certain conditions.

A qualifying child would be:

• Your child (including legally adopted), stepchild, foster child, sibling, half-sibling, step-sibling, or a descendant of any of them (for example, your grandchild or niece) AND
• Permanently and totally disabled OR under the age of 19 as of December 31, 2020 (under 24 if a full-time student) and younger than you (or your spouse, if filing jointly) AND
• Lived with you for more than half the year AND
• Single (or if the child is married, you would have to qualify to claim them as a dependent even if you're not going to claim them as such). 

A qualifying relative would be:

• Your mother or father, if you are qualified to claim them as a dependent (even if you're not claiming them as such) OR
• A relative related by blood, legal adoption, or marriage other than a parent (child, sibling, grandparent, nephew, aunt, step-parent, in-law, etc.) AND lived with you for more than half the year AND that you're able to claim as a dependent (even if you're not claiming them as such).

TurboTax software will ask you simple questions and give you the filing status that you are eligible for based upon your answers.

See also this TurboTax Help.

[Opus 17]

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@anitaaustin wrote:

My son, who is over 17, was not a full time student this year so I entered that I didn't have dependents. That changed my filing status to single from head of household. Then, when he qualified for the tax credit, I entered for the tax credit but didn't realize that would show him as a dependent.   Then when we submitted his tax return it was rejected because it said I claimed him as a dependent. Now I can't modify my return until it gets processed.

Turbo tax should have flagged that I marked no dependents when I marked for the tax credit. And possibly had me change my filing status back to head of household.

The issue is that I owe a ton in taxes and now my son won't get the stimulus check.  

I marked not to take the money I own from my account until 4/10/21 and don't know if I need to wait till then to refile my taxes so my son can refile his. Or if I can just do it after the Feds process my forms but not the payment.

What a royal pain that could have been avoided if Turbo Tax would have flagged that issue or advised to change my filing status.

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When using Turbotax online, it carries over your dependents from the previous year.  You can't just say "no", you have to go into the list of dependents and either re-run the interview to see if they qualify, or delete them from the list of dependents.  You should always print and review your return before e-filing and that would also have shown you the child in the list of dependents.

Also, the age limit is not 17, it is 18.  For a child who is "under age 19" on December 31, they don't have to be a full time student to be a dependent, they only have to live in your home and not pay their own way. 

[anitaaustin]

What the problem is, I changed from head of household to single and removed him from the first part of the forms because I didn't think I could claim him. When I added him as a Child Tax Credit I didn't realize it was also a Dependent claim.  TT should have flagged that I should have changed back to Head of Household with the addition of the dependent.  It also automatically added his SS # so it had his info somewhere.  It may seem like I should have known, but if I were a tax expert, I wouldn't need turbo tax.

He will file with Yes someone else could claim him, but now I need to refile to decrease how much I owe by several thousands of dollars.  

I have used TT for many many years and each year I find some small issue but this year the issues are vast.  I also got the W2c message that is on another chat and is causing anxiety for a lot of people. 

[anitaaustin]

Actually, he qualified for Other Dependent Credit according to TT questions.

[anitaaustin]

Here's what TT says:

You can file as Head of Household if either SITUATION A or SITUATION B described below applies to you.

You provide a home for certain other persons, you were unmarried or legally separated as of December 31, 2020, and ONE of the following was true:

1. You paid over half the cost of keeping up a home that was the main home...

2. You paid over half the cost of keeping up a home in which you lived and in which one of the following also lived for more than half of the year:

(a) Your UNMARRIED child, adopted child, grandchild, great-grandchild, or stepchild. This child does not have to be your dependent.

TT won't let me claim HofHH for this situation.  I need help!!!

[DawnC]

Since you say he is going to file and say that he can be claimed on another tax return, you should add him back as a dependent on your return.  I think you already did that if it is showing that you got the Other Dependent Credit for him ($500).   Once he is back on your return, go through the filing status questions again to update your filing status to Head of Household.   He has to be a dependent on your return in order to claim the HoH status.   The situation you mention about him ''not being a dependent'' is the case in which you are qualified to claim him as a dependent, but you are giving his other parent a signed form 8332  (Dependent Release) so that the other parent can claim the Child Tax Credit and his dependency.   In this case, you would not get the Other Dependent Credit, but you, as the custodial parent still retain the right to the Earned Income Credit and to the HoH status.  But you mentioned nothing about the other parent claiming him, so you should add him back as a dependent and take the credit and the HoH status.  

However, since you have already filed, you are going to have to wait until that return is processed, which it should be by the time the amendment Form 1040X is ready in TurboTax.  The 1040X that is in there now is not up to date.    One good thing about this year is that you can e-file the amendment this year instead of having to print, mail, and wait 16 weeks for the IRS to process it.  

If your son changes his return to can be claimed, his return won't be rejected, and can re-submit his return.   @anitaaustin

[Sunny66]

How much do you get for someone 62

[Hal_Al]

@Sunny66 

Q. How much do you get for someone 62

A. The "Other" (other than a child ) Dependent credit is $500 and is non refundable.  It can only reduce your tax liability. It's the same regardless of the age of the (non child) dependent.