Economic Stimulus Payments for parents/daughter when situation changed from 2019 to 2020

[Trudi]

I have a family that I am preparing their returns.  The daughter was a dependent last year, but was left out of the stimulus do to her age.  She is filing independent this year (2020) since she moved out and is working full time.  Pro-Series wants to give her parents the stimulus for her that was based on the 2019 return this year, and also give the daughter the stimulus money.  Is this ok, or if not.....how do I fix it???  Seems like a lot of double dipping, but not sure how to answer the questions correctly and not let this happen (or who should actually get the stimulus??)

[TAXOH]

If you fill out the worksheet correctly since the daughter is not a dependent in 2020 the parents wouldn't be getting the stimulus for her when they file.  How old is the daughter?

[IRonMaN]

I'm not sure how ProSeries would "want to give".  Since she is on her own, her name should be completely gone off of the parent's return.  If you have entered the advance payments that the parents actually received during the year, everything should work out like it is supposed to.

[athaureaux6]

I have been saying that there is a glitch in the system and that same thing happened to me. I have one or two cases where the person was 22 or 23 and a dependent in 2019 and have moved out for 2020 filing independently and PS calculated the stimulus for them in 2020. I realized that when PS transfer the personal information from 19 to 20 and we erased the dependents, that blank space left creates something that it seems to tell the system there was a minor there, because even after 17, they wouldn't have received the stimulus anyway if they were dependents, but as I said, the blank space is creating something that is making PS calculate the stimulus as if they qualify. I realized this because I completed a completely new return with the same tax payer without the two dependent and the stiumulus was calculated right. I recommend that everybody be aware that when we erase a dependent whose information is transferred from last year, double check the calculation of the stimulus because  PS will give her/his the stimulus. Hope an employee will take note of this. 

[Trudi]

She is 22.  And I did complete the worksheet properly.  I removed her from her parents return, but when I entered the amount they received for their stimulus, the software added the amount for her (I guess since she was on the 2019 return)

[Trudi]

I'm not sure why it is adding the stimulus for her to their return either, unless it is because she was a dependent in 2019.  Hence, the question.

[Trudi]

Is there a way to fix this without doing a new return (client?).  I don't want to lose their history since they have a fairly complicated situation.

[dkh · Accepted solution]

What if you delete the Recover Rebate Credit Worksheet.... it won't be removed - removed but it will force it to repopulate.   I use this method to get rid of errors on the Identity Verification Worksheet.   When a DL is expired the system won't let you delete the info - so I delete the worksheet.  It automatically returns blank.      Hence, the RRC worksheet will delete then return automatically - hopefully with correct numbers.

[TAXOH]

I've deleted dependents and have not had that issue.  I just checked with the other preparer here and his are calculating correctly also when deleting a dependent.

[Terry53029]

@athaureaux6 maybe @Orlando will check this for us

[Orlando]

Asked internally.. will get someone to followup

[Beachkids5]

Should the new filer get the stimulus in 2020 since parents didn't get it 

[qbteachmt]

"Should the new filer get the stimulus in 2020 since parents didn't get it"

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.