New client. Has two kids. Tom in high school, and Sally in college. Sally received a $1,200 EIP check in May 2020. She originally filed a 2018 return with single filing status, and didn't show she was taken as a dependent on her parent's 2018. She later amended her 2018 return which showed her as a dependent on her parents return. Parent's filed a 2018 return taking Sally as a dependent. Except for dependency issue, Sally is otherwise eligible for EIP in 2018. Per EIP rules, Sally would not be eligible for EIP checks if she was a dependent on another taxpayer's tax return. According to the IRS, they base taxpayer eligibility for EIP checks on 2018 or 2019 returns per IRS guidance at https://www.irs.gov/coronavirus/economic-impact-payment-information-center#eligibility

Sally and her parents have not filed 2019 tax returns. Sally now has EIP check in hand and its burning a hole in her pocket (i.e. college kid). If her parent's do not take her as a dependent on their 2019 tax return and Sally files a return in 2019 that shows she's not a dependent on her parent's return, then Sally appear to be entitled to a check.

The question...should I advise Sally to deposit her EIP check now, file her 2019 tax return (and her parent's 2019 tax return) as if Sally was not a dependent, and be done with it? Or do I wait until Sally's 2019 return is eFiled before advising her to deposit?

Any thoughts? Thanks guys and gals for your input.

Phil C.