Not Claiming Children as Dependents

[kjl67]

Is there an option to NOT claim your children as dependents if you provided > 50% of their support since you are phased out by income limits.  Trying to limit tax on their unearned income which is getting taxed at high rates and while I am not getting any benefit from it because of phase outs

[SweetieJean]

You do not need to claim dependents. However, if they file their own returns, they still must indicate that they can be claimed as dependents.

[ColeenD3]

While you do have the right not to claim them, they do not have the right to be considered independent. If they meet the qualifications to be your dependent, they are not entitled to claim certain benefits, even if you do not claim them. 

There is a common idea that a parent can decide not to claim a dependent so that they can reap certain benefits. The truth is, a qualifying child or a qualifying relative is your dependent.  Also, not claiming her as a way of avoiding the kiddie tax is potentially tax fraud. Must claim self as dependent

While the IRS never comes out and says that you must claim a dependent, they do give the definition of who is a dependent.

The term “dependent” means:

• A qualifying child, or
• A qualifying relative.

While you can choose not to claim your dependent, the qualifying person MUST indicate on his own return that he is a dependent, but that no one will actually claim him as such.

In TurboTax Online, the questions read:

Someone else can claim me as a dependent on their tax return. You would answer yes.

And this person will claim me on their 2021 tax return. You would answer no.

[kjl67]

thank you - which I think still brings you back to the higher income tax on unearned income?

[ColeenD3]

Yes, you will pay a higher tax on the unearned income. The IRS found many loopholes in tax law and many of them were closed, like this one.

[anonymouse1]

My student filled her return out exactly like that - we *can* claim her, but we are *not* claiming her.  Her brother who helped her file said she did not seem to get any extra deductions or anything, her standard deduction was something like $500 more than her earned income, not the full standard deduction that he gets as a single working adult.

So how do we take her off our return, because TT automatically carried her info over from last year?

[BrittanyS]

To remove a dependent, you will follow the steps in this link provided by TurboTax:

• How to add or remove a dependent