Hank
Level 3

I have a client that has a son going to college.  He only received a small W-2 for the 2020 tax year ($2,010) and unemployment of $18,976 (under PUA).  His earned income did not exceed 1/2 of his support and his unemployment appears to be considered unearned income for purposes of form 8615.  Am I correct that even if the parents were not to claim him as a dependent he would still be required to complete form 8615 and pay tax at the parents tax rate?  The parents feel that the son does not provide more than 1/2 of his own total support as he lives with them, they pay part of his tuition, etc. so they are planning to claim him as a dependent.  This is despite the large amount of unemployment that he received.  If they do meet the definition to claim him as a dependent he would not qualify for any recovery rebates.  I feel that I am missing something in this case so any help would be greatly appreciated.

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