Federal filing got rejected due to dependents

[jawckey]

I screwed up something, pl. help. My situatuation is this.

- My daughter is a full time student in Missouri in 2023

- I paid her tuition of $60K for the whole year

- But for boarding and lodging she has taken student loan, but it is about 25K or so.

- She does not have any income

- I had been filing her return all these years and did so this year already though she may not need to file since income is 0.

- But I think I entered her as a dependent in my return. So mine got rejected.

To correct this ... this is what I am planning to do ...

- Do not show her as a dependent in my return

- And cough up an additional $500/- due to this mistake. I am OK with this.

- Refile just mine

This looked easier than filing an amendment for my daughter's return. 

Is this OK?

Secondly, I live in Arizona and I kept my daughter's permanent address as AZ only. So I filed her AZ return, and not Missouri. I had been doing this in the last couple of years too. Is this too OK? OR does she need to file Missouri also?

regards

[Bsch4477]

She did not have to file any return and I’m puzzled that if she had no income you were able to file one since you can’t file a return with zero AGI.  
My understanding is that you filed her return without saying someone else could claim her. You should amend her return and mail your return. Do you qualify to claim education credit?  You can only do that if she is claimed as your dependent. 

[BillM223]

To answer your questions in reverse order...

You and your daughter lived in Arizona. Presumably, when she finishes school, she will come home to Arizona. In this case, she lives in Arizona, and the stay at college in Missouri is considered temporary.

She would not need to file a Missouri return unless she took a part-time job (or full-time) in Missouri, which you say she hasn't done.

Now to the first question.

It is not normal to file a return for a dependent who has no income. Not normal does not mean illegal, but just not common.

It is much more common for the parent who is paying for so much of the school burden (tuition, supplies, books, etc.) to also file for the educational credits. These do the parent with the higher tax bracket much more good than the student with no tax.

Honestly, I would think that this would benefit you more than $500, but, of course, I can't know that without seeing your return. But the education credits can be much larger than that. This is in part before the American Opportunity Credit is only partially refundable and the Lifetime Learning Credit is not refundable at all. Non-refundable credits do your daughter no good at all, but may well do you a lot of good.

I assume that the $500 is the Credit for Other Dependents, but please go look at you taking the education credits.

[jawckey]

- Last year someone told me to put $1/- as income so that I can file electronic.

- Ths year, I download an INT form for her Fidelity account and that showed interest of $84/- but no taxes due. So this year it allowed electronic filing.

- She is 28 years old

- I do not qualify for education credit

- I missed to mention her as her claiming as my dependent in her return.

So I have no option other than

- Amedning her return

- And filing mine manually?

I can't just file electornic and pay the $500/-?

Pl. help clarify.

regards

[jawckey]

I do not qualify for education credits, I entered all school issued tax form etc. Turbo tax decided I dont get any credits. Good or bad, my income is high.

So, pl. advise if I can get away with ...

- Paying $500 on my return and file electornic OR

I must 

- Amend my daughter's to make her say i can claim her as dependent

- And file manually mine

regards

[Bsch4477 · Accepted solution]

You can choose to not claim her as a dependent and efile. You will just be giving up the $500 child tax credit which I understand you are willing to do. Since no tax advantage was gained by your daughter filing as not being a dependent there is no need for her to amend even though her return is technically inaccurate. No harm, no foul. 

[LeticiaF1]

If you decide to file an amended return for your daughter, you will have to wait until her return is fully processed.  When you are ready, follow the steps below to amend her return:

To amend your return:

1. Log in to your TurboTax account
2. Go to Tax Home
3. On the FAQ's on the right side, select How do I amend my return?
4. The option of Amend Using TurboTax will show, select it.

The program will guide you as you make the changes necessary, you do not need to enter anything other than what you are changing.

For your tax return to select that you want to file your return by mail see the following steps:  

1. Sign in to TurboTax.
2. Select Continue or Pick up where you left off.
3. Select File in the menu.
4. Complete Steps 1 and 2, then select Start or Revisit next to Step 3.
5. On the We've determined the easiest way to file your taxes screen, select Change next to the return you want to file by mail, and select File by mail on the next screen
6. Be sure to Save.
7.  See the filing instructions document that prints out with the paper copy of your return. You'll see the mailing address in those instructions. 

If you paper file both returns, both will need to be mailed to different addresses so it is important to follow the filing instructions document.  

@jawckey