My daughter is 18, she's in college, she worked and then received unemployment benefits during the pandemic. Will I still be able to claim her on my taxes as a dependent?

[ColeenD3]

Probably. Please see the qualifications below. She must meet one of the conditions.

Qualifying Child

Relationship — the taxpayer’s child or stepchild (whether by blood or adoption), foster child, sibling or step-sibling, or a descendant of one of these.

Residence — has the same principal residence as the taxpayer for more than half the tax year. Exceptions apply, in certain cases, for children of divorced or separated parents, kidnapped children, temporary absences, and for children who were born or died during the year.

Age — must be under the age of 19 at the end of the tax year, or under the age of 24 if a full-time student for at least five months of the year, or be permanently and totally disabled at any time during the year.

Support — did not provide more than one-half of his/her own support for the year.

Qualifying Relative

• You provided more than half of their financial support. More info
• They made less than $4,300 in gross income during 2020 unless they are a qualifying child.
• They live with you or they are related to you. (Your relative must live at your residence all year or be on the list of “relatives who do not live with you” in Publication 501.) 
• They are a U.S. citizen, resident alien, national, or a Canadian or Mexican resident.
• They aren't (or won't be) claimed as a dependent by someone else.
• They aren’t filing a joint return with their spouse.
• You are not being claimed as a dependent on someone else's return.

[Barney3]

I am in the same situation.  Will the PUA benefits over $2,200 be subject to the kiddie tax (parents tax rate)?  Seems crazy that they opened the programs to college students, but then hit them with the additional tax.  Please advise.  Thanks!

[JeffreyR77]

There is no guidance indicating that college dependents' unemployment benefits are taxable at 'kiddie tax' rules. 

Your daughter's unemployment income does not affect her dependent status as your Qualifying Child unless she provides more than half her own support. 

@tgsmith2020  @ColeenD3

[Kt001]

A similar situation. My daughter, age 20 and full time student, worked and received unemployment. She has outstanding student loans. She is saving her unemployment to pay on student loans, once the repayment deferment period ends. She does not pay room or board. Does her unemployment income count as her  contribution to her support for 2020?

[LenaH]

No, her unemployment would not matter as long as she is not providing more than half of her own support for the year. 

To claim a dependent under the qualifying child rules, all of the following requirements must be met: 

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

@Kt001