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My client's daughter was 18 at the end of 2020. She is still in high school and earned $3000 working part time in 2020. She is a dependent in both 2019 and 2020. The parents did not receive either stimulus payments for her and she did not receive any as this is the daughter's first year filing a tax return.
My questions are:
1. The parents are entitled to a Recovery Rebate credit for the daughter, yes?
2. If yes, how do I answer the question 6 and 9 on the Recovery Rebate Worksheet (in ProSeries Basic) asking to "Multiply $500 ($600) by the number of qualifying children under age 17 at the end of 2020 listed in the Dependents section on page 1 of Form 1040 for whom you either checked the "Child Tax Credit" box or entered an adoption taxpayer identification number."?
She is a dependent on her parent's return and cannot claim the Recovery Rebate on her own return.
I apologize if I'm beating a dead horse here. I really tried to search through questions others have asked and didn't exactly find the same scenarios.
Thanks for any help or advice you can give!
J
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Not under age 17 and is a dependent.
1. No
2. No
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Not eligible for EIP#1 and EIP#2, but the pending legislation that just passed the Senate, if approved by the House and signed by the President, will give the parents $1,400 for her if their income is less than $150K (phased out at $160K).
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Ya gotta hold off on filing that return.
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"I really tried to search through questions others have asked and didn't exactly find the same scenarios."
Perhaps it would help to review what is really happening:
The funds were paid out as Advanced payment against a projection. The projection used 2018 or 2019 tax returns. But 2020 is the Actuals. You use the 2020 return to reconcile what a person is entitled to, against what they got.
If the person is not a dependent in 2020, then they would be entitled to the payment/credit as individual filers. That doesn't mean "not being claimed." It means "no longer qualifies as a dependent."
You might want to bookmark these links and read the IRS guidance.
Interactive wizards portal for determining dependency:
https://www.irs.gov/help/ita
And:
https://www.irs.gov/newsroom/economic-impact-payment-information-center-topic-a-eip-eligibility
https://www.irs.gov/coronavirus/second-eip-faqs#Eligibility
One for each EIP.
Don't yell at us; we're volunteers
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Only if you would get a bigger check based on 2019 income than 2020 income.
The more I know the more I don’t know.
