Can I claim a child as a dependent if last year I chose not to?

[AdamAsks]

This year, I may elect to not make my 20 year old a dependent on my 2020 return.

Next year (for 2021 filing) I want him to be a dependent due to the fact that he will start college (bit late, I know).

Is this a problem or red flag?

Thanks in advance ~

[LenaH]

Yes. Please keep in mind that even if you elect to not claim your 20 year old as a dependent, your son will still have to mark off on his return that he can be claimed as a dependent by someone else. It is a problem if you do not claim him this year (for purposes of the Recovery Rebate Credit) and then decide to take him as a dependent in 2021. At his age (prior to attendance at college), it very likely he is still a dependent. 

You should claim him as a dependent if he meets all of the following qualifications: 

• He isn't claimed as a dependent by someone else.
• He is a U.S. citizen, resident alien, national, or a Canadian or Mexican resident.
• He is not filing a joint return with their spouse.
• He is under the age of 19 (or 24 for full-time students).
  • No age limit for permanently and totally disabled children.
• He lived with you for more than half the year (exceptions apply).
• He didn't provide more than half of their own support for the year.

[AdamAsks]

Thanks, @LenaH 

My family did not qualify for the Recovery Rebate Credit. He wants to file himself, not a dependent, so he can receive the 2021 Recovery Rebate Credit being given out now.

You say "It is a problem if you do not claim him this year (for purposes of the Recovery Rebate Credit) and then decide to take him as a dependent in 2021" - we're not eligible for the 2020 RRC; if I claim him as a dependent for 2021 next year, what is the issue? That he received a 2021 RRC when I then later, claimed him as a dependent? Trying to understand. Thanks~

[NCperson · Accepted solution]

@AdamAsks - they way you posed that response may not get you to where you want to be.

You certainly have the option to claim or not claim your child as a dependent, your child does not have that same option.  

the dependent is asked CAN you be claimed by someone else, not WERE you claimed by someone else.  See the difference.

So even if you decide not to claim a child, that will not make the child eligible for the stimulus payments.

That stated, if the child's circumstances changed, that would be different.  For example, last year the child did not work and was not in school and lived at home, so you CAN claim him as a dependent.  This year, the only thing that changed is that the child earns more than $4300, so you can NOT claim him.  Next year, he is unemployed again, so you CAN claim him.

The point is the child can not decide on a whim and the way the wind is blowing to change the answer to CAN you be claimed; the answer won't changed based on a whim only upon the circumstances.

[Opus 17]

@AdamAsks 

if a person, such as your son, qualifies to be claimed as a dependent by someone else, they must answer the question “yes, I can be claimed as a dependent“ even if they don’t want to be claimed and even if the person who could claim them agrees not to claim them.  Answering yes will disqualify them from recovery rebate in their own name.

if the person answers “no, I can’t be claimed as a dependent“ in order to claim the rebate, when this is untrue and they could have been claimed as a dependent, this may constitute tax fraud. We don’t know how aggressive the IRS will be in pursuing this, but they have three years to audit normal tax returns and six years in the case of fraud.

there is a second question, “will the person who could claim you actually claim you this year?“  This question only affects eligibility for the American opportunity credit.  Sometimes, a child will qualify for a larger American opportunity credit in their own name if their parents don’t claim them, this usually occurs when the parents are high income, but the child must also have their own substantial income earned from working.

Regardless of the odds of getting caught, I’m not sure that your son should be starting their young life filing a fraudulent tax return.  It seems like that would send the wrong message to the child.