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Recovery Rebate Credit

joyztoy
Level 2

My client's daughter was 18 at the end of 2020.  She is still in high school and earned $3000 working part time in 2020.  She is a dependent in both 2019 and 2020.  The parents did not receive either stimulus payments for her and she did not receive any as this is the daughter's first year filing a tax return.

My questions are:

1. The parents are entitled to a Recovery Rebate credit for the daughter, yes?

2. If yes, how do I answer the question 6 and 9 on the Recovery Rebate Worksheet (in ProSeries Basic) asking to "Multiply $500 ($600) by the number of qualifying children under age 17 at the end of 2020 listed in the Dependents section on page 1 of Form 1040 for whom you either checked the "Child Tax Credit" box or entered an adoption taxpayer identification number."?

She is a dependent on her parent's return and cannot claim the Recovery Rebate on her own return.

I apologize if I'm beating a dead horse here.  I really tried to search through questions others have asked and didn't exactly find the same scenarios.

Thanks for any help or advice you can give!

J

 

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5 Replies 5
Camp1040
Level 8

Not under age 17 and is a dependent.

1. No

2. No

BobKamman
Level 13

Not eligible for EIP#1 and EIP#2, but the pending legislation that just passed the Senate, if approved by the House and signed by the President, will give the parents $1,400 for her if their income is less than $150K (phased out at $160K).  

Camp1040
Level 8

Ya gotta hold off on filing that return.

sjrcpa
Level 15

Only if you would get a bigger check based on 2019 income than 2020 income.


ex-AllStar
qbteachmt
Level 15

"I really tried to search through questions others have asked and didn't exactly find the same scenarios."

Perhaps it would help to review what is really happening:

The funds were paid out as Advanced payment against a projection. The projection used 2018 or 2019 tax returns. But 2020 is the Actuals. You use the 2020 return to reconcile what a person is entitled to, against what they got.

If the person is not a dependent in 2020, then they would be entitled to the payment/credit as individual filers. That doesn't mean "not being claimed." It means "no longer qualifies as a dependent."

You might want to bookmark these links and read the IRS guidance.

Interactive wizards portal for determining dependency:

https://www.irs.gov/help/ita

And:

https://www.irs.gov/newsroom/economic-impact-payment-information-center-topic-a-eip-eligibility

https://www.irs.gov/coronavirus/second-eip-faqs#Eligibility

One for each EIP.

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