My 19 year old college student daughter lived with her brother for most of 2020 while she was at school. We lived in SC, and she stayed in NC and only came home occasionally. Her DL and residency stayed in NC and never switched to SC when we moved. Her job was impacted by Covid-19, and because of that she received over $15K in income (between work and unemployment) and now owes taxes (didn't withhold enough). We did not provide more than half of her income - her schooling was paid for (money given by a relative earlier in life and was in savings), and between her brother and herself, they pretty much took care of themselves. My question - do I have to claim her as a dependent? If I don't, she'll end up not owing money, but if I do she owes quite a bit. The kicker is that if we don't claim her as a dependent, for some reason TT now shows that she would be eligible for the stimulus money.
No, you cannot not claim her as a dependent.
She would not qualify as a dependent under the qualifying child rules because she provided more than half of her own support for the year.
She also would not qualify as a dependent under the qualifying relative rules because she did not live with you, made over $4,300 and provided more than half of her financial support.
Lastly, dependents on tax returns do not receive stimulus payments if they are 17 or older. She should be eligible to get the Recovery Rebate Credit since she will no longer be a dependent for the tax year.
Simular question. My son is 21, in college full time and I support 50%+. Do I HAVE TO claim him as my dependent or can he claim himself if I don't claim him? Reason being the stimulus payment are more then the $500 tax credit. I make north 200K. If I can allow him to claim himself for 2020 can he get the first 2 stimulus payment made in 2020?
Thanks in advance
here is the twist - and there is a lot of misunderstanding on this..
no, you do not have to claim your child. It is your option. The IRS simply does not care.
your child is asked the question on HIS tax return, CAN someone else claim you. It doesn't ask DID someone else claim you. So regardless of whether the parent decides to claim the child or not, the child must answer "YES", he CAN be claimed.... and therefore is not eligible for the stimulus.
The IRS always wins :(
I support myself at least 50% but live at my parents home & pay small rent. They make too much money to really get any benefit from claiming me other than the $500 credit. However, if I click I cannot be claimed and they do not claim me, it says I could qualify for stimulus. Do I have to be claimed? What is difference between CAN be claimed and WILL claim? One word makes my refund almost $2k larger.
CAN CLAIM YOU means you are not able to claim yourself as an Independent Taxpayer. It means that someone else supplies more than half of your support.
WILL CLAIM YOU means that you are a dependent, but the personal that could claim you as a dependent, is not claiming you.
(There is just a handful of reasons this might happen and it does NOT clear you to claim yourself if you do not supply more than half of your own support)
It might help to go backwards. Decide if you are a dependent. If you are not, then you file Single, not a dependent.
Are you a dependent?
In addition to the qualifications above, to claim an exemption for your child, you must be able to answer "yes" to all of the following questions.
- Are they related to you? The child can be your son, daughter, stepchild, eligible foster child, brother, sister, half brother, half sister, stepbrother, stepsister, adopted child or an offspring of any of them.
- Do they meet the age requirement? Your child must be under age 19 or, if a full-time student, under age 24. There is no age limit if your child is permanently and totally disabled.
- Do they live with you? Your child must live with you for more than half the year, but several exceptions apply.
- Do you financially support them? Your child may have a job, but that job cannot provide more than half of her support.
- Are you the only person claiming them? This requirement commonly applies to children of divorced parents. Here you must use the “tie breaker rules,” which are found in IRS Publication 501. These rules establish income, parentage and residency requirements for claiming a child.
Many people provide support to their aging parents. But just because you mail your 78-year-old mother a check every once in a while doesn’t mean you can claim her as a dependent. Here is a checklist for determining whether your mom (or other relative) qualifies.
- Do they live with 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. About 30 types of relatives are on this list.
- Do they make less than $4,300 in 2020 or 2021? Your relative cannot have a gross income of more than $4,300 in 2020 or 2021 and be claimed by you as a dependent.
- Do you financially support them? You must provide more than half of your relative’s total support each year.
- Are you the only person claiming them? This means you can’t claim the same person twice, once as a qualifying relative and again as a qualifying child. It also means you can’t claim a relative—say a cousin—if someone else, such as his parents, also claim him."
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You didn't provide much information about your age, etc., but if you supported yourself 50% or more, you cannot qualify as your parents' dependent or qualifying relative. I'm assuming you're single and will file single. You must file your own return independent of your parents. It doesn't matter what your age is. Since your parents can't claim you, you should be eligible for the $1400 stimulus that was paid out around March 2021. If you didn't personally receive it, your tax return should show that you didn't receive one and you will receive the $1400 as a credit on your tax return. If your parents were awarded a stimulus for you as a dependent (based on their 2020 return), the good news for them is that they don't have repay it. The IRS doesn't want have to have to do a lot of "bookkeeping" on who might have received a stimulus payment they weren't entitled to.