stimulus check for college student-file independently

[shellyxulei]

if the turbotax refund show zero , does it mean no stimulus check?  My daughter file her tax return independently in 2020. ( We claimed her as dependent in 2019 in our tax return. but not this year .she is 19 years now full time college student, we paid her tuition. So she could be claimed as dependent but we will not do it this year ) So She uses Turbotax to file the tax, she has no income in 2020 so I think she should be eligible to get $1400 stimulus check , right? but at the end , it shows "0" for both state and federal . so does it mean no stimulus check for her ? Thanks 

[SweetieJean]

If she qualifies to be your dependent (which apparently she does), then it does not matter if you do not claim here.   She is still not eligible for any stimulus.

[NCperson]

this issue of claiming a dependent or not gets misunderstood.

As the taxpayer, you always have the option to claim or not claim your dependent.  The IRS does not care.

HOWEVER, 

your dependent (your daughter in this case) has to answer the question on HER tax return, CAN someone claim her? that answer is always the same, regardless of the decision the taxpayer makes

So for her, she will need to answer "YES, someone CAN claim me", even if her parent's don't claim her

Dependents are not eligible to receive the stimulus directly if they CAN be claimed by someone else.

So, as the parent, you always have the option not to claim her, but her answer is ALWAYS , YES, someone CAN claim be; she is not eligible for the stimulus (and you could lose the $1400 for the 3rd stimulus) because someone CAN claim her.

The IRS was too smart for this potential loophole! 

[Opus 17 · Accepted solution]

First, the $1400 round 3 stimulus is not anywhere on the tax return.  Line 30 would claim the round 1 ($1200) and round 2 ($600) rebate if the taxpayer was eligible.  Round 3 is paid separately by the IRS.  

Second, if a person qualifies to be claimed as a dependent on their return, they must answer "yes, I can be claimed as a dependent", even if the person who could claim them agrees not to claim them.  Answering "yes" will disqualify them from round 1 and round 2 recovery rebate on line 30 and they would not get round 3 either.  

However, if a person answers "no, I can't be claimed" so that they get the rebates, when they should have answered "yes", that is potentially tax fraud. We don't know how aggressively the IRS will pursue this, but they have 3 years to audit all returns and 6 years in case of deliberate fraud.  

Your best legal situation is for your child to correctly answer "yes, I can be claimed as a dependent" and they will get no rebate.  Then, if you actually claim them as a dependent, you will get a round 3 payment of $1400 for them, even though you did not get a round 1 or round 2 payment, because the rules changed for round 3. 

[NCperson]

@Opus 17 on the $1400, I was telegraphing what COULD happen to the 3rd stimulus.

1) if the IRS uses 2019 tax data (where the child is a dependent) to send out the 3rd stimulus but the tax payer doesn't list the dependent, then the taxpayer should get the stimulus

2) but if the IRS uses the 2020 tax data without the dependent and the taxpayer doesn't list the dependent on the 2021 tax return, there should be no stimulus payment for the dependent and there should be no Recovery Credit. 

timing is everything on these stimulus / recovery credits when adding / subtracting dependents. 

[Opus 17]

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@NCperson wrote:

@Opus 17 on the $1400, I was telegraphing what COULD happen to the 3rd stimulus.

I did not see your reply, I was writing mine. 

The IRS has indicated that they are making further round 3 payments as tax returns are processed.  It seems at least possible that if the parent files a return and claim their 19 year old college student child as a dependent, the IRS will include that dependent in round 3 or maybe even send an additional round 3 payment.  It may not be necessary to wait until the 2021 filing season. 

[NCperson]

@Opus 17 - agreed