Does my refund belong to me or my dependent? I filed Head of Household on my taxes

[Wende913]

My daughter and grandson lived with me all year and I provided 100% of their care. She is arguing that the dependent refund should belong to her even though I paid for all their needs. Is she correct or does the refund belong to me for paying for all their needs last year?

[terry-n · Accepted solution]

Your refund belongs to you, both legally and morally. It's a refund of taxes that you paid (and/or credits that Congress intended for you), not anybody else (including any dependents you may be able to claim). The intent of the tax code in giving a head of household a break is to allow for the fact that part of their income is going toward paying to meet the basic needs of additional people, because that meeting of basic needs is something the federal and state governments very much want to happen. You get a bigger refund in virtue of the fact that you pay to support your daughter and grandson, not  the mere fact that they exist. Tell her that if she wants your income tax refund, she'll have to reimburse you for the associated income taxes you paid throughout the year in order to get it. 🙂

(If she disputes that you paid the support of her and her son needed for them to qualify as your dependents, that's another matter. If they do qualify as your dependents, then she's got some nerve expecting even more of your money.)

[SweetieJean]

Totally agree with @terry-n.  How much would rent, utilities, food, etc. have been if you had charged her?  And why isn't the child's other parent providing any support?

[Affordabletaxes2021]

Absolutely! She doesn’t even deserve the money that is not hers. Clearly she has an entitlement issues and if she were out in the real world she’d never make it with that attitude.

Hold your ground you need that money to pay all the  extra expenses she has caused. You’re not responsible for your adult daughter’s cash flow problems. She needs to get a job and take care of her own child. We support you!! 

[Wende913]

I was divorced and her father is deceased.

[VolvoGirl]

Does your daughter work or have income?  She needs to file her own return to claim any credits or refunds.  

[Wende913]

My daughter has medical issues and cannot work. That is why she moved in with me with my grandson. 

[Opus 17]

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@Wende913 wrote:

My daughter has medical issues and cannot work. That is why she moved in with me with my grandson. 

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Legal, moral, and family practical are often very different.

Legally, if you provided more than half your daughter's support and she doesn't work, you can claim her as a dependent.  Legally, if your grandchild lived in your home more than half the year and you have more taxable income than your daughter, you can claim your grandchild as a dependent.  The tax benefits of claiming a dependent are much higher in 2020 and 2021 than in a "normal" year, but those benefits always go to the taxpayer, and not the dependent, because the tax code recognizes that the taxpayer is supporting the dependent.  Even if your daughter tried to file her own return, she would be legally obligated to answer "yes, someone else can claim me as a dependent" which disqualifies her from any stimulus payments or rebates in her own name for herself or her child.

As a practical matter, you likely received $2800 extra in your refund due to the fact that your family moved in with you, that you would not have received if they lived some place else.  (Although it might be less than $2800 if you are high income.)  You also likely qualified to file head of household if you are single, which may have saved you some extra money.

Legally, is your daughter entitled to the rebate?  No.  The rebate goes to the taxpayer who claims the dependent.

Morally, is your daughter entitled to a share of the rebate?  That's a matter of opinion.  My own opinion is probably not, since you probably spend much more than $2800 on food, clothing, and other expenses for your extended family.  

Should you give her a share anyway, for family peace?  That's complicated and no one can answer that for you, except maybe a family therapist.  If my daughter came to live we me due to financial problems, and then demanded I pay her for the privilege, I would be heartbroken that she felt so entitled as to ask in the first place.  But that's me.  You have to decide what works for you.  Good luck.