What Do I Do with Stimulus Money Received for Former Dependent

[RandyAg]

On 2019 return, we filed as married filing jointly and claimed two dependents.  

In 2020, one of those dependents (son, 24) got married and will file his 2020 taxes as married filing jointly.  

So in 2020, we will file as married filing jointly with one dependent (she's 21 and in college).  

We just received $5600 in stimulus payment.  Am I correct that $1400 of it was due to our son, who is no longer a dependent of ours?  And what do we need to do with that extra $1400?  Does it need to be returned to the IRS, and if yes, how do we do it?

Thank you,

Randy

[MinhT1]

The IRS has based the amount of the third stimulus on your 2019 tax return as they have not yet processed your 2020 tax return. And from the 2019 tax return, all four people were eligible for the third stimulus and you received $5,600 ($1,400 x 4).

You can keep the stimulus for your now married son and do not have to return it even if he is no longer your dependent in 2020.

[MinhT1]

The IRS has based the amount of the third stimulus on your 2019 tax return as they have not yet processed your 2020 tax return. And from the 2019 tax return, all four people were eligible for the third stimulus and you received $5,600 ($1,400 x 4).  

You can keep the stimulus for your now married son and do not have to return it even if he is no longer your dependent in 2020. 

[MinhT1]

The IRS has based the amount of the third stimulus on your 2019 tax return as they have not yet processed your 2020 tax return. And from the 2019 tax return, all four people were eligible for the third stimulus and you received $5,600 ($1,400 x 4).    

You can keep the stimulus for your now married son and do not have to return it even if he is no longer your dependent in 2020. 

[Cynthiad66]

The IRS has based the amount of the third stimulus on your 2019 tax return as they have not yet processed your 2020 tax return. And from the 2019 tax return, all four people were eligible for the third stimulus and you received $5,600 ($1,400 x 4).     You can keep the stimulus for your now married son and do not have to return it even if he is no longer your dependent in 2020. 

[SDavis18]

I am in a similar situation. It seems from the answers that I can keep the entire stimulus. But what about the newly non-dependent son/daughter? Will they be able to able to obtain the $1400 on their own, based on our 2020 returns?

We both filed in early February, but like most, they have only been “accepted”. So, they used 2019. 
If I do not have to return the $1400 for her, and she can claim it for herself, aren’t we being paid twice? I don’t want to be in a situation where either of us needs to repay money. I’d rather return it, or pay her from the money I received.

[JotikaT2]

Technically, you are being paid based upon the latest tax return on file with the IRS.  

In 2021, there will be a similar Recovery Rebate Credit that she will be able to claim on her tax return indicating she did not receive the credit. 

Frequently asked questions regarding stimulus payments

If you are concerned, you can either return the payment or when she files her income tax return for 2021, she can indicate she did receive her stimulus payment and you can give her the amount issued to you.

@SDavis18

[SDavis18]

Thanks. Although it seems from the three answers provided to the original post, that the “Parent” can keep the money.
If the now non-dependent son files for a Rebate Credit on his 2021 taxes, do we have any idea (IRS guidance) if the parent will be asked to repay that money (possibly with penalties and interest)? 

[JotikaT2]

That is correct.  As mentioned before, you can keep the money.  The IRS has indicated they will not be asking you to return the money in regards to payments for dependents.

The only official IRS guidance was provided to you in the link above.  We cannot give you any other advice as the IRS has not issued any further clarification to date.

The IRS is continually making changes to their website.  I recommend reviewing the link above periodically for updates.