I have a client that has a son going to college. He only received a small W-2 for the 2020 tax year ($2,010) and unemployment of $18,976 (under PUA). His earned income did not exceed 1/2 of his support and his unemployment appears to be considered unearned income for purposes of form 8615. Am I correct that even if the parents were not to claim him as a dependent he would still be required to complete form 8615 and pay tax at the parents tax rate? The parents feel that the son does not provide more than 1/2 of his own total support as he lives with them, they pay part of his tuition, etc. so they are planning to claim him as a dependent. This is despite the large amount of unemployment that he received. If they do meet the definition to claim him as a dependent he would not qualify for any recovery rebates. I feel that I am missing something in this case so any help would be greatly appreciated.
@Hank "If they do meet the definition to claim him as a dependent he would not qualify for any recovery rebates."
That's true for EIP#1 and EIP#2. For the next one, all I know is what I read in the newspaper.
"Adult dependents are eligible for stimulus payments under the Democrats’ current plan, according to multiple people with knowledge of the matter."