Dependent with unemployment?

3 replies
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My daughter was working at the beginning of the year but her job closed due to covid. She earned about $1,500 from her job and about $14,000 in unemployment. While I believe she needs to file her own return, can I still claim her as a dependent?

Jessmore

Level 5

If you provided more than 50% of her support you can claim her but if you do she will more than likely have a tax liability for the unemployment she collected.

MegS99Author

Level 2

But what does support mean? There are a few places where they ask about earned vs unearned income. I understand unemployment is unearned income (the $14,000) and the $1,500 she received from her job is earned income. Does the unearned income count towards her own support? If it does then no, I did not provided more the 50% oh her support. But if that $14,000 doesn't count towards that calculation then I did.

Jessmore

Level 5

Her unemployment would count toward her total income for the year. How old is she? It sounds like she should probably be claiming herself. Its pretty straightforward if she pays for most of her own expenses then she should claim herself. If she is off legal age, if she claims herself she can claim the stimulus payments which I'm sure you probably didn't receive depending on her age and her tax liability will be lower. Is she in college? I would run the number both ways with you claiming her and not and also run her numbers filing independent versus not and see the best way to file.