Ask Terry Questions Stimulus Check and Dependents

Stimulus Check and Dependents

By Terry Savage on March 14, 2021 | Wild Card

In your January newsletter, you said that children over age 17 can get the first two stimulus checks by not declaring them on the parent’s return as long as they have income. I have a son over age 17, in college, and had income in 2020. I am using H&R Block software to file his return. I am not declaring him as dependent on my return. Currently, it shows that he will get the $1800 for the two stimulus payments. However, there’s a question asking “Can he be declared as a dependent on someone else’s return?” If I answer yes to this question, the $1800 is removed from his refund.

When I go to the IRS website and look at the Recovery Rebate Credit worksheet, the first question states:

1) Can the taxpayer be claimed as a dependent on another person’s 2020 return? If filing a joint
return, go to line 2.
>No. Go to line 2.
>Yes. STOP. Taxpayer cannot take the credit. Do not complete the rest of this worksheet and do
not enter any amount on line 30

Also, when reading the the Eligibility Rules for the Recovery Rebate Credit (also on the IRS website), it says:

>You are not eligible for the Recovery Rebate Credit if any of the following applies:

>You may be claimed as a dependent on another taxpayer’s 2020 return (for example, a child or student who may be claimed on a parent’s return or a dependent parent who may be claimed on an adult child’s return).

Now, based on those rules, I’m not sure why you are saying that children over age 17 ARE eligible for the two stimulus payments. There’s a difference between “CAN you be declared as a dependent on someone else’s return?” and “ARE you declared as a dependent on someone else’s return?”

Can you explain this conflicting information? I’m still hoping that my son can get the two payments but don’t want to file an amended return if your recommendation if incorrect. Please advise.

Thanks.

Terry Says

If the child — young adult — contributes more than 50% of his support, he can be declared as independent — and has the right to say he cannot be claimed as a dependent on another person’s return. So the real question is not whether he had “any” income — but whether his income accounted for more than 50% of his support!! Some college students have scholarships, loans, and work earnings that make them independent — eligible to claim the two previous stimulus payments (and now get the third of $1400) by filing their own return AND saying they are not dependents on someone else’s return.

money

ASK TERRY

a personal
finance question