Aged out dependents and Recovery Rebate Credit Worksheet

Forum|Forum|4 years ago
March 28, 2022
15 replies
41 views

I have a client that claimed 2 dependents on their 2020 tax return and received $5600 in recovery rebate stimulus for those 2 dependents. 1 of the dependents aged off of the parents return for 2021, and the worksheet does not allow me to clarify this. It is therefore showing that the client should have only gotten $4200 in stimulus and has thus resulted in a balance due on the client tax liability. Is there a way to fix this? Do I have to include the aged-out child on their tax return? Even though he really doesn't qualify as a dependent anymore due to age? When the IRS was issuing stimulus, did they take into account that the dependency status could change from 2020 to 2021 due to age? I don't want to impact the aged out child negatively on his tax return, but at the same time, he was a qualifying dependent when the stimulus was issued.

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qbteachmt

Level 15

"and received $5600 in recovery rebate stimulus for those 2 dependents"

It's $1,400 each. Do the math. That's 4 people. Who is the missing 4th?

Are you confusing the Child Tax Credit advance with the Stimulus/Recovery/EIP advance payments?

"should have only gotten $4200 in stimulus"

$1,400 X 3 = $4,200

"did they take into account that the dependency status could change from 2020 to 2021 due to age?"

You do this. You remove a dependent, you add a dependent, and if you do a return for someone, you also make sure to checkmark if they can be claimed as a dependent by another. That question is not "are you being claimed?"

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J

Jennifer McCrackenAuthor

Level 3

OMG, I'm not sure why you think its ok to be so abrubt, but I think my question is clear.

In 2020 MFJ, 2 dependent children

In 2021 MFJ, 1 dependent child, the other no longer qualifies for 2021.

When the stimulus was issued there were 4 qualifying dependents, but the 2021 worksheet does not show for that because the 4th aged off the parents' return during 2021.

I'm looking for the best solution to not negatively impact the parents or the aged-off child.

The worksheet does not take into account that a dependent may have aged-out during 2021.

So I am looking for a way to report this so that both the child and the parents aren't penalized for this.

qbteachmt

Level 15

It's not "abrupt." It's precise to what you stated. It's to address this via a text-based forum, because we are not face-to-face.

I pointed out what you stated in perspective to what is provided for. You need to do that math to see there are Errors to consider.

"When the stimulus was issued there were 4 qualifying dependents"

I don't know what this means. You told us "a client" and "2 dependents." Now there were 4? And your client = 5 people? See how this gets confusing, fast?

The payout was in advance of Reality. The 2021 tax form(s) are the Actuals, and the reality. Use the payouts in filing: "here's what we are entitled to, and here is what we got."

It really is not Harder than this.

"I'm looking for the best solution to not negatively impact the parents or the aged-off child."

No. You are going to use the Right Filing status for what applies, for each person whose tax return you are preparing.

"So I am looking for a way to report this so that both the child and the parents aren't penalized for this."

What makes you think anyone will be penalized at all? Are you confusing the Child Tax Credit advance with the Stimulus/Recovery/EIP advance payments? Because CTC has a repayment provision. There is no repayment provision for EIP, so far.

Until you do the tax forms, you won't know what is going to happen. You don't get to pick from options. You file what applies.

Don't yell at us; we're volunteers

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