Recovery Rebate credit

Forum|Forum|5 years ago
February 11, 2021
11 replies
63 views

Most clients who used to claim their parents as a dependant in their 2019 taxes wants to drop them to allow them to recover the EIP payments, I find this kind of fishy, what you guys think?

ProSeries Professional

This topic has been closed for replies.

Best answer by Just-Lisa-Now-

I had one client ask about this, I told them if they tell me they no longer support Dad, I can take him off their return, but I wont be putting him back on next year. So they would lose the $500 ODC each year.

Dad can then go to the senior center or use IRS free file and file his own return, I wouldnt be the one to file it since I think that he CAN be claimed as a dependent, whether they want to claim him or not.

She said theyd discuss it as a family and let me know, so we'll see.

IRonMaN

Level 15

If they were dependents in the past, I'm guessing they are still dependents. The smell of stimulus money shouldn't change anything. But then again, maybe they really weren't dependents after all. Kind of funny how that thinking changes when tax money enters the picture.

By the way, what time is that fish fry?

Slava Ukraini!

Just-Lisa-Now-

Answer

Intuit Community Champion

I had one client ask about this, I told them if they tell me they no longer support Dad, I can take him off their return, but I wont be putting him back on next year. So they would lose the $500 ODC each year.

Dad can then go to the senior center or use IRS free file and file his own return, I wouldnt be the one to file it since I think that he CAN be claimed as a dependent, whether they want to claim him or not.

She said theyd discuss it as a family and let me know, so we'll see.

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

Accountant-Man

Level 13

Lots of people fishing to get the best benefit for dependents.

** I am "Elevating with Intention!"

M

MohamedAuthor

Level 5

I was waiting for your reply

qbteachmt

Level 15

"wants to drop them to allow them to recover the EIP payments"

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.

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