Student supporting themselves

Forum|Forum|4 years ago
February 25, 2022
1 reply
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My niece is a full-time college student (age 20) is not claimed as a dependent on parents tax return. She supports herself with her 529 plan plus a job. The majority of her support is from the 529 plan. What is the best way to answer the question "Did you support yourself in 2021?"

Also should she be eligible to get the stimulus amount of $1,400?

JamesG1

Level 15

Hopefully, this is helpful.

The statement on the screen Did you support yourself in 2021? reads:

Supporting yourself means paying for more than half of your living expenses with earned income.

Properly administered 529 distributions are not income of any kind. In cases where a portion of a 529 distribution is taxable income, the income is not earned income.

The IRS defines earned income as taxable income you earned as an employee, such as wages, salaries, commissions and tips.

The qualifications for the third stimulus payment are:

you were a U.S. citizen or U.S. resident alien in 2021,
you were not a dependent of another taxpayer’s 2020 tax return, and
you have a Social Security number.

There are income limitations are if your adjusted gross income (AGI) is more than:

$150,000 if married and filing a joint return or filing as a qualifying widow or widower
$112,500 if filing as head of household or
$75,000 if filing as a single or as married filing separately.

If your niece did not receive the third stimulus payment, she may qualify to receive that amount through a Recovery Rebate Credit found on line 30 of the 2021 Federal 1040 tax return.

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KB_MissyAuthor

Level 2

Thanks JamesG1 for your response it is appreciated. I am not getting asked the question about the Recovery Rebate Credit. My niece appears to qualify for the 2021 stimulus. Is there a way to enter manually?

JamesG1

Level 15

Try this.

In TurboTax Online, you are prompted to input the third stimulus check information under Review down the left hand side of the screen. You can also access your stimulus check choices by following these steps:

Down the left side of the screen, click on Federal.
Across the top of the screen, click on Other Tax Situations.
At the screen We're almost there… or the screen That's all we need…, click on Let’s keep going.
At the screen Let’s double-check the amount you received, answer the questions and click Continue.

In TurboTax Desktop, follow these steps:

Go to Federal Taxes / Other Tax Situations.
Scroll down to Done with Other.
At the screen Let’s double-check the amount you received, answer the questions and click Continue.

If you have not received the third stimulus check, you will receive your payment in the form of a Recovery Rebate Credit on line 30 of your 2021 Federal tax return when you file.

TurboTax will compare your stimulus payment amount to the computations within TurboTax. The computations within TurboTax are based upon the information that you have entered into the tax software. If you are due an additional amount, it will be issued as a Recovery Rebate Credit (RRC) on line 30 of the 2021 1040 tax return.

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