How to handle Child W2?

[kvsub]

My child W2 amount is around 8500 $. When i file my tax returnTurbotax does not consider my child as qualified dependent (since the child has earned more than 4300 $ in W2).How do i handle this situation? I am also aware tax filing is mandatory only when the earned income is above 12000 $. I guess i can still file tax return for my child to get refund etc. 

[DoninGA]

How old was the child in 2020?  Was the child a full time student in 2020?

[kvsub]

yes. The child is a full time college student (20 years old)

[kvsub]

yes. The child is a full time college student (20 years old)

[DoninGA]

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@kvsub wrote:

yes. The child is a full time college student (20 years old)

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Since the child is a full time student under the age of 24, their income is not a factor on whether or not you can claim them as a dependent under the Qualifying Child rules.  Your only issue is if the child provided over one-half of their own support in 2020.  Though doubtful they did, you should use the IRS support worksheet to verify support to the child - https://apps.irs.gov/app/vita/content/globalmedia/teacher/worksheet_for_determining_support_4012.pdf

To be a Qualifying Child -

1. The child must be your son, daughter, stepchild, foster child, brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant of any of them.
2. The child must be (a) under age 19 at the end of the year, (b) under age 24 at the end of the year and a full-time student or (c) any age and permanently and totally disabled.
3. The child must have lived with you for more than half of the year. Temporary absences while away at college are considered living with you.
4. The child must not have provided more than half of his or her own support for the year.
5. If the child meets the rules to be a qualifying child of more than one person, you must be the person entitled to claim the child as a qualifying child.
6. The child must be a U.S. citizen or U.S., Canada or Mexico resident for some portion of the year.
7. The child must be younger than you unless disabled.

[NCperson]

@kvsub - suggest going back and reviewing how you added this child to your tax return.  as a fulltime student, he is your dependent.

there is no income test in this situation.  The $4300 you reference is the income test for non-students. 

[kvsub]

Assuming  i had provided support for the full year, i can claim them as dependent in my tax return and ignore the Turbo tax Q then that says "does the child made 4300 $" (for finding the eligible dependent Q from Turbo tax). Correct?  if i answer to that Q saying yes Turbotax removes the child as dependent. I guess i have to answer the Q as No and proceed. Correct?  Do i still file separate tax return for child since they have a separate W2 for the amount 8500 $? 

[NCperson]

first, the student must file his own tax return for his income.  He needs to check the box stating he CAN BE claimed as a dependent on someone else's tax return. 

On your tax return, are you answering the questions correctly?  You might want to delete the child and start over.  once you answer he is a full time student, it shouldn't be asking about income. 

 And if you answer the income question as a 'no' to workaround the problem, TT may not ask about his AOTC (Form 1098T) and that would cause another problem.

[macuser_22]

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@kvsub wrote:

Assuming  i had provided support for the full year, i can claim them as dependent in my tax return and ignore the Turbo tax Q then that says "does the child made 4300 $" (for finding the eligible dependent Q from Turbo tax). Correct?  if i answer to that Q saying yes Turbotax removes the child as dependent. I guess i have to answer the Q as No and proceed. Correct?  Do i still file separate tax return for child since they have a separate W2 for the amount 8500 $? 

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No.   You should not even get that question.     You answered another question incorrectly.

Delete the dependent and re-enter.   Be sure that the child lived with you 7 months or more.

Be sure when it asks if the child provided more the  half of the child's own support, you answer NO. 

[kvsub]

Got it. Thanks. Deleting and recreating the child name entry fixed the issue. Now i am not getting that Q for checking 4300$ for dependent qualification. Good for now. I think i may have a question around How do i list down 529 plan deductions in our both our tax returns. (ours and child). I may post another Q when i get to that topic. Thanks 

[NCperson]

and you may not have to post the 1099Q (529 plan) on your return at all - read the form closely..... and there are plenty of posts under education that talk about this.