I have two tax returns for 2019 where the child has graduated and is no longer a dependent on the parents return. The preparer left that the taxpayer could be claimed as a dependent but for this return they were not claimed. When I review, that is what I am looking at, is the actual tax return and they each claimed themselves. Now with the stimulus they are not showing as getting a payment yet and their dad thinks it is because we marked they could be claimed. When you file a manual tax return, this doesn't get sent, so I am wondering if the IRS just hasn't added their information to the app or if this does get transmitted and we need to file an amended return. That won't be processed for several months anyway.
If they "could be claimed", then they dont qualify to claim themselves or for the EIP...so Im not sure exactly what youre asking.
And anything sent in on paper will probably still be in processing during the holiday season.
In proseries there are two questions,
Can taxpayer be claimed as a dependent?
If yes, was taxpayer claimed as dependent?
The e-file was Yes and No respectively.
They were able to deduct the student loan interest for this return, which means they did claim themselves,
That being said, if the return was mailed the responses are not mailed in so the IRS doesn't get that information. Are the responses to these two questions sent to the IRS in the e-file? Otherwise the IRS wouldn't know that the response was yes to can they be claimed? They actually can not be claimed by the parents because they have graduated and their income is over $38K.
They are worried that because yes was the answer on the first question, that the stimulus payment is being withheld from them. I don't think that is the case.
Yes, I know the rule what I am trying to find out is what is transmitted in the electronic file that ProSeries sends to the IRS.
No one else can claim them. Even though the information worksheet had a question that was answered yes. That was incorrect. The tax return was correct in that they claimed themselves.
If someone CAN claim you but didnt, you can still take the school credits...never thought about the student loan interest deduction....
You've looked at the two college graduate returns and verified the "Someone can claim you as a dependent" box is NOT checked? If NOT checked, they should be eligible for EIP. How long ago were the 2019 returns efiled? Is it possible it's too soon to expect IRS to send them the EIP? Have you checked the IRS "Get My Payment" portal to see what pops up for these two college graduates?
Does that response get submitted in the electronic file? That is all I need to know.
It was incorrectly marked as yes but it should have been no and they are eligible to claim themselves and get the EIP payment.
Because if you mail a return that isn't asked!!
There is a lot of information entered into ProSeries and not all of it is actually transmitted to the IRS. So I am trying to determine if this will have an impact since all of the stimulus payments have not been sent out or even entered into the Get My Payment app.
The answers checked on the Federal Information Worksheet do not get transmitted to IRS. The answers are to assist with proper forms, checking boxings on return, etc If the children's tax returns have the box marked "Someone can claim you as a dependent" that is the defining information for the EIP. Doesn't matter what wasn't checked on the information worksheet.
They were all processed on 2/20 including another son who he has been claiming himself for several years.
The parents info is showing up in Get My Payment and the three kids are not. Two that were marked that could be claimed and one that was not marked and claimed himself.
So you are saying that this gets transmitted in the e-file? How do I go about correcting that? If I do amended return, there is nothing that changes on the return?
On the 1040X Page 2, doesnt the exemption number change?
If the box is incorrectly marked, amend return so box is not marked with explanation why it was checked on original return. If original return had full standard deduction allowed there should not be a change to refund/tax due. You will need to mail the amended return...….IRS is backlogged with unopened mail. Could be a long long time before the amended return hits the system. May be just as well off to wait until the 2020 tax return is filed and get the $1200 credit.
Is your ultimate goal to get the $1200 for the two college graduates ? If yes, you need to be realistic and honest with your clients about the amount of time it will take to make this happen. Mail an amended return to correct the dependent situation then wait ….and wait.....and wait.....and wait.