Newly Graduated College Student & RRC

Forum|Forum|4 years ago
May 19, 2022
10 replies
27 views

A newly graduated student applied for the RRC on 2021 Return filing as Single nondependent of parents. Received Notice disallowing the $1400.00 RRC claiming error on the Form 1040 listing that one of the five errors was the reasoning. I looked over the errors and cannot agree with any of the reasons they claimed.

1. It looks like the Student could have been claimed on the parents return because I found out that the student graduated in May of 2021 and not the prior year 2020. Now how would IRS have known this I do not know if this was the reason?

2. Let say I have the student pay on the notice without amending the student's return and have parents amend their return to claim the student? Will they disallow the E-filing because the student's Social Security Number was used on another's Primary Return?

ProSeries Professional

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Best answer by Just-Lisa-Now-

@Just-Lisa-Now- No they didn't receive EIP 3 also income to great. Looking further the Student was Age 24 at end of year, Student Jan - May 2021, Income greater than 4300.00 at 31,000.00. Taking into account Age and Income I cant see why they would disallow the 1400.00.

With Income at 31000.00 he would have paid greater than 50% of support also.

I am over thinking this I think.

Thanks

Yea, I'd dispute that correction letter, hes over 23 and makes more than enough to support himself, should be entitled to the RRC for 2021.

Camp1040

Level 10

Are you sure the parents didn't claim your client on their return? If client graduated in May of 21 did they provide more than half of their support. Maybe the parents claimed the AOTC.

JRCAuthor

Level 7

@Camp1040: I'm sure they didn't claim the student because we did the Parent's Return. Agh... The Student lived with the Parents for the Year which without going through Actual Living expenses may have been supporting the child. (Housing, Food, ect.)

Which is why I would amend the parents and have them claim the Student.

Thank you

Just-Lisa-Now-

Intuit Community Champion

"Let say I have the student pay on the notice without amending the student's return and have parents amend their return to claim the student? Will they disallow the E-filing because the student's Social Security Number was used on another's Primary Return?"

Youd need to allow 4-6 months for processing time on that amended return before you could EF any other return that included him on it.

Im guessing the parents already got the stimulus for the kid as an EIP advance during 2021, he was on their 2019/2020 return, right? I guess you could pick up some educational credits on the parents return if the kid was included.

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

JRCAuthor

Level 7

@bob11_2: The parents income was to large for the EIP 1, 2. But did claim the Student for 2020 & 2019 and not for 2021.

So do you mean that the Return will bounce back if I amend to claim the Student on the parents return? I would need to Paper File the amended returns then?

I could claim the ED credits if they received a 1098-T which I no record of receiving yet.

Thanks

Just-Lisa-Now-

Intuit Community Champion

Too high for EIP 1 & 2......Did they get EIP 3 that included the $1400 for the kid? If so, Im guessing this is why they changed the kids return. How much income did the kid have in 2021, could he have paid for more than 50% of his own support?

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

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