Our 18 Year-Old Son Won $10,000 in the Lottery. If he files a Tax Return, Can We Still Claim Him as a Dependent?

[Lola_USA]

My 18 year-old son won $10,000 from a scratch-off ticket in the Florida lottery. He is a Senior in high school and has no job and no income, therefore his total earnings for 2023 is $10,000. When he claimed his prize, they withheld 24% in Federal Taxes ($2,400) and 0% state taxes (Florida has no state income tax). If he files a tax return, can he get part of that $2,400 back? If so, how much? And if he files a tax return, will we still able to claim him as a dependent on our joint (married) tax return? What is the best course of action here? Thanks!

[xmasbaby0]

Yes, you can still claim your 18 year old as a dependent.  His income does not go on your tax return.   He can file his own return and must say on his return that he can be claimed as someone else's dependent.

MY DEPENDENT HAD A JOB

If your dependent has a W-2 for his after-school job, summer job, etc.    (or in your child's case. a winning lottery ticket)  you do not include the information on your own return. You can still claim your child as a dependent on your own return.  He/she can file his own return for a refund of some of his withheld wages (he won’t get back anything for Social Security or Medicare), but MUST indicate on it that he can be claimed as a dependent on someone else’s return.  (Supervise this closely or prepare it for him!)

If your dependent’s earnings were over $400 and were reported on a 1099Misc or 1099NEC then he must file a return and pay self-employment tax for Social Security and Medicare.

You might also want to use free software from the IRS Free File versions:

https://apps.irs.gov/app/freeFile/

[DoninGA]

Yes, he can file a tax return and Yes you can still claim him as a dependent on your tax return as long as he has not provided over one-half of his own support in 2023.

On his tax return he Must indicate that he can be claimed as a dependent.  He should get all the federal taxes withheld as a federal tax refund.

You claim him as a dependent on your tax return using the Qualifying Child rules.

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.