We have raised our grandson for 23 years. Instead of marking him a child, Turbo Tax did not let us mark him child thou 100% disabled. IRS disagrees with TT.

[Rain Woman]

IRS says child of any age if disabled. TT should have asked if he was disabled rather than kick him down to dependent, and this is first year we have got him as dependent. Software needs re-written. This year big money is involved.

[Opus 17]

I don’t know what you are complaining about.  There are two classifications of dependent, “qualifying child,“ and “qualifying relative.“  A grandchild who lives with you more than half the nights of the year, and is permanently disabled, will be considered a “qualifying child dependent.”  If your grandchild has more than $4300 of taxable income to report, they can’t be a qualifying child dependent and will be a qualifying relative dependent, even if the money was earned in a sheltered workshop.  However, there is very little difference in tax benefit between being a qualifying child or a qualifying relative dependent.

For a 2020 tax return, the economic recovery rebate is limited to dependents age 16 or under. The $2000 child tax credit is also limited to dependents age 16 and under. This is not a failure of TurboTax to classify the dependent properly, it is an age limit written into the laws.

If you have not already ready received round three of the economic stimulus, this is $1400 per person including dependents of any age, the IRS should be issuing payments as incoming tax returns are processed.

For 2021, the child tax credit has been expanded to $3000 and the age limit has been extended to 17, rather than 16, but this will still not benefit you.

It’s not clear what benefit you think TurboTax is denying you.

[DavidD66]

TurboTax does ask if your dependents are disabled. This is in the "My Info" part of the program, under "Your children and others you support".  See screenshot below:

[Hal_Al]

@Rain Woman  said "TT should have asked if he was disabled rather than kick him down to dependent"

It does ask that. You just missed it. Go back and edit the dependent.

@Rain Woman  said "This year big money is involved" 

No.  Even disabled, he must be under 17 to get the 2020 stimulus ($500 + $600)

@Opus 17 said "If your grandchild has more than $4300 of taxable income to report, they can’t be a qualifying child dependent and will be a qualifying relative dependent" 

I don't think that's right.  His disability makes him a qualifying child regardless of income or age.  He just needs to live with the grandparents and not pay more than half his own support.  It's a qualifying relative that can't have more than $4300 of income.

@Opus 17  said "there is very little difference in tax benefit between being a qualifying child or a qualifying relative dependent"

A qualifying child qualifies the taxpayer for child based EIC

[Opus 17]

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@Hal_Al wrote:

@Opus 17 said "If your grandchild has more than $4300 of taxable income to report, they can’t be a qualifying child dependent and will be a qualifying relative dependent" 

I don't think that's right.  His disability makes him a qualifying child regardless of income or age.  He just needs to live with the grandparents and not pay more than half his own support.  It's a qualifying relative that can't have more than $4300 of income.

That's generally correct, I was over-thinking.

However, we must remember that "disabled" for income tax purposes is not the same as other medical definition of disability.  Disabled for income tax purposes means "unable to perform substantial gainful work."  The child's ability to work a regular job for minimum wage without substantial accommodations is considered proof that the child can perform gainful work, even if they have medical issues.  So while there is no fixed dollar limit to be a "qualifying child" dependent, if the dependent has a substantial income, the IRS may start asking questions. 

@Opus 17  said "there is very little difference in tax benefit between being a qualifying child or a qualifying relative dependent"

A qualifying child qualifies the taxpayer for child based EIC

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Good point, if the grandparents have income earned from working. 

[slbadb]

my child is 7.  How does the IRS define disabled for minors?

[xmasbaby0]

@slbadb There is no federal tax benefit or credit for saying that a 7 year old child is disabled.   If your child still needs someone to take care of him while you work when he is older than 12 then you will want to say he is disabled so that you can still get the child and dependent care credit.  Your state might have different laws regarding disabled children.