Level 3

Question

EIP Payments related to other dependents ["OD's"] in college

Forum|Forum|5 years ago
March 28, 2021
13 replies
54 views

Tax client has 23-year old son who is in college.

Tax clients income is too high to qualify for any Education credits.

Tax client has claimed son on all previous tax returns and has received the "OD" credit.

This year, the OD credit is $500.

The son has nominal W-2 income of $300.

Can the son file his tax return, claiming himself, in order to get EIP3 of $1,400. Which is $900 better than his father getting the OD credit of $500.

Or, is the father obligated to claim his son on his tax return?

Thanks for your knowledge and guidance.

Jabbo

ProSeries Professional

This topic has been closed for replies.

J

jeffmcpa2010

Level 10

Check out the IRS information regarding "Is eligible to be claimed as a dependent".

Eligible is more definitive than actual.

J

JABBOAuthor

Level 3

Thanks Jeff, I'll check it out.

abctax55

Level 15

CFS Tax Tools software has a LOT of flowcharts that are very helpful in determining many of these things (dependent, qualifying child, qualifying relative, etc...)

HumanKind... Be Both

abctax55

Level 15

The son has nominal W-2 income of $300.

And that is more than 1/2 of his support ?????

I seriously doubt it, especially if Mommy & Daddy make so much their income is too high to get the EIP's.

HumanKind... Be Both

J

JABBOAuthor

Level 3

Thanks abctax55..........

Parents support son.

So maybe it comes down to the support test 😐

You are correct, parents don't qualify for any of the EIP's.

qbteachmt

Level 15

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

And:

https://www.irs.gov/newsroom/irs-is-issuing-third-round-of-economic-impact-payments

One for each EIP.

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