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Client was claimed as dependent for 2019 by his Dad. Client older than 17 yrs. so no stimulus check for 2019. Question is this. Client will file his own tax return for 2020. Can I enter $600 on recovery rebate form since client never got any stimulus check for $600? Thanks,
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If the taxpayer (your client) didnt receive the advance EIP, then you would enter 0.
Are you sure he no longer qualifies as a dependent of his parent for 2020? He was able to cover more than 50% of his own support?
♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
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Probably the first of several times this question will be asked today, based on trend from last few weeks. I hope others will join me in asking, before answering: What changed from 2019 to 2020, that the kid is no longer a dependent? (Other than personal wish and opinion.)
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I concur with both above......does the child truly qualify to claim self or is it only to receive the RRC? I've had a few ppl inquire already. A local financial guru here in Chi-town is encouraging ppl to do just that.
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Get ready for this scenario: IRS freezes refunds for teen-agers with low income who were claimed as dependents in 2019, especially if they have tuition paid for 2020. They don't get $1,800 now or $1,400 in the next round. And their parents don't get the $1,400 either, even thought the proposal now is to allow it for all dependents. Whose fault is it? Well, at least we know who will be blamed.
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But, but, but all of the preparers visiting here are way too sharp to just file a kid’s return without doing due diligence about support issues.
If you liked that one I have some other really good tax preparer jokes.
Slava Ukraini!
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Yours is the second answer to mention "support," but is that really an issue? A 19-year-old not in school, living at home and earning $8,000 plus tips delivering pizza, is still not a dependent even if he doesn't provide more than half of his support.
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Im going with IRS rule in that 19, no school and earning above that $4,000-ish states that he/she cannot be claimed as dependent. In that case, they would qualify for RRC.
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This kid would also have to file his own return, too, which is what OP said. Granted the kid looks to be a dependent.
The more I know the more I don’t know.
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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. 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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"Can I enter $600 on recovery rebate form since client never got any stimulus check for $600?"
And that is why you need to read that info I provided.
Don't yell at us; we're volunteers
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If an adult child qualifies to be claimed by his parents, are the parents required by law to claim him?
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No. But in that case nobody "claims" him and he doesn't qualify for the credits.
Slava Ukraini!
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They don't have to but the dependent must indicate that they can be claimed by someone if they file a tax return.
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Furthermore, the parents don't qualify for the EIC for taxpayers without a qualifying child, because they have one even if he's not claimed. Or something like that. There's something in the proposed legislation that would loosen that restriction, but we don't read any of that until it becomes law.
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I have a 23 year old that is in graduate school, does not live at home and makes over $20,000. From all I read, this person is entitled to both EIP payments, but Proseries is showing an adjustment taking the money away from the person. How do we get this corrected or is the IRS correct?
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Uncheck the "claimed as a dependent" box
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I doubt it's taking money away from the person.
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