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Dependent with income over 4300 - Kiddie tax

hamida_surti
Level 1
I have a client with a 21 year old full time student. This year He received around 3K in wages and around 12K in unemployment compensation due to Covid. The questions are:
Is he still a dependent on the parents return. He lives in the family home and they have family meals paid for by the parents.
Do the parents claim the Education credits?
Is there a way he does not have to go through the kiddie tax process due to the unearned income.
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3 Comments 3
rbynaker
Level 13

Your best bet at this point is to wait until the software is updated and $10,200 of unemployment is excluded from gross income.  Then kiddie tax won't be too much of a problem.

hamida_surti
Level 1

Thank you for replying, I am not sure about what you mean when you say wait till the software is updated. Can you please elaborate on that a little bit.

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sjrcpa
Level 15

One of a hundred times mentioned in the last few days

https://proconnect.intuit.com/community/proconnect-tax-discussions/discussion/2020-unemployment-due-...

The more I know, the more I don't know.