Tax help...Dependent and now not dependent?

[HeatherC]

Wondering if anyone can help with this? We received stimulus money based on our 2019 taxes for our daughter who was a dependent (full time student) at the time.

This year (2020 taxes) we can no longer claim her as she is working full time and 24 years old.

We are currently doing her 2020 taxes (single, independent) and turbo tax is giving her credit for $1800....1200 and 600 for the first two stimulus bills.
Is this right since we already received stimulus money for her?

Any tax people have any advice or input on this?

Thanks!

 

[neverlandsky]

By no means am I a tax expert. Here's my take. I believe the stimulus is one and done for each eligible social security number including dependents. With TT, in the stimulus section you input just the dependent stimulus funds already received for stimulus 1 & 2. Which would be $1200 & $600. Can't claim stimulus 1 &2 as an adult and as a dependent. Since DD was a dependent for 2019, she's not eligible for stimulus 1 & 2 as an independent adult in filing a 2020 tax return due to funds already received as a 2019 dependent. Hopefully someone else can chime in here as well.

 

[disneychrista]

I think the way the stimulus works if you qualified for it in 2020 and did not get it you get it on your taxes.

If you got the stimulus based on 2019 taxes you don't qualify for in 2020, you get to keep it.

If you are concerned have her input that she "got" whatever amount of stimulus YOU got for her when TurboTax asks her what she got.

 

[kdonnel]

It is my understanding that it was understood that some would get to double dip. It was an expected outcome.

 

[HeatherC]

By no means am I a tax expert. Here's my take. I believe the stimulus is one and done for each eligible social security number including dependents. With TT, in the stimulus section you input just the dependent stimulus funds already received for stimulus 1 & 2. Which would be $1200 & $600. Can't claim stimulus 1 &2 as an adult and as a dependent. Since DD was a dependent for 2019, she's not eligible for stimulus 1 & 2 as an independent adult in filing a 2020 tax return due to funds already received as a 2019 dependent. Hopefully someone else can chime in here as well.

That’s what I thought. But TT is pretty automated and you basically answer yes or no to the questions. We have gone through it several times and get the same thing every time. Will be following it up with call to an accountant to be sure. Nothing is simple.

 

[HeatherC]

It is my understanding that it was understood that some would get to double dip. It was an expected outcome.

This could be the case even though we are definitely not trying to do anything underhanded. Will see what we find out before filing it.

 

[MarcIsMe]

Your daughter is entitled to both of the EIP’s. They were an advanced payment of the Recovery Rebate Credit on the 2020 return. As long as she is filing with an income of less than $80K ($75K for the full credit) and is not a dependent and has not received EIP1 or EIP2 she is good. The software at some point should ask what she received and you value those fields with zero.

 

[Grace&Carolinesmom]

We had a similar situation. Our daughter was a dependent through our 2019 tax filing. We are not claiming her for 2020 taxes going forward because she graduated college and has a full time job as of May 2020.

She filed her 2020 taxes in Feb and received the first two stimulus payments as part of her refund because she had not received them previously. As mentioned by pp, those two payments were based on 2019 filings but were prepayments for 2020.

We have NOT filed our 2020 taxes yet. Our daughter received the 3rd stimulus payment a few weeks ago because she had already filed her 2020 taxes and is now independent. We also received the 3rd stimulus payment a few weeks ago that included $1400 for her as our dependent.

I contacted our accountant and he advised that with the first 2 stimulus payments, the IRS noted that overpayments did not have to be paid back so he expected this recent payment to be the same. He said if the policy changes, it would affect our tax filing for 2021 next spring.

 

[HeatherC]

We had a similar situation. Our daughter was a dependent through our 2019 tax filing. We are not claiming her for 2020 taxes going forward because she graduated college and has a full time job as of May 2020.

She filed her 2020 taxes in Feb and received the first two stimulus payments as part of her refund because she had not received them previously. As mentioned by pp, those two payments were based on 2019 filings but were prepayments for 2020.

We have NOT filed our 2020 taxes yet. Our daughter received the 3rd stimulus payment a few weeks ago because she had already filed her 2020 taxes and is now independent. We also received the 2rd stimulus payment a few weeks ago that included $1400 for her as our dependent.

I contacted our accountant and he advised that with the first 2 stimulus payments, the IRS noted that overpayments did not have to be paid back so he expected this recent payment to be the same. He said if the policy changes, it would affect our tax filing for 2021 next spring.

l!

Thanks! This is very helpful.

 

[bjscheel]

Yep, she is definitely entitled to them!