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Recovery Rebate Worksheet - New Dependent & Alternating Year Dependent

ddortiz
Level 2

Happy 2020 Tax Season All,

I have encountered a unique situation with a client.  Taxpayer claims his son in odd years.  He also had a new child in 2020.  I have removed the dependent he does not claim in 2020 and added the new dependent.  The recovery rebate worksheet is calculating line 15 ($1,700) and line 18 ($1,200).  The recovery rebate form is not giving him the $1,100 which he is entitled to for his new dependent. 

Has anyone encountered this situation?

 

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qbteachmt
Level 15

"Taxpayer claims his son in odd years. He also had a new child in 2020."

That makes it a wash. The advanced funds for a child not being claimed, really applies to the child being claimed.

Did he get all the funds, already? You don't get it for 2 children in 2020 unless you are claiming 2.

 

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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"Level Up" is a gaming function, not a real life function.

View solution in original post

5 Replies 5
qbteachmt
Level 15

"Taxpayer claims his son in odd years. He also had a new child in 2020."

That makes it a wash. The advanced funds for a child not being claimed, really applies to the child being claimed.

Did he get all the funds, already? You don't get it for 2 children in 2020 unless you are claiming 2.

 

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.

 

*******************************
"Level Up" is a gaming function, not a real life function.

View solution in original post

sjrcpa
Level 15

FYI This is not a unique situation. In fact it has been discussed here.


ex-AllStar
ddortiz
Level 2

Thank you for that information and additional explanation.  Based on his 2020 situation he has received the full amounts he was entitled to (EIP #1 $1,700, EIP #2 $1,200). 

 

TaxGuyBill
Level 15

@ddortiz  wrote:

The recovery rebate form is not giving him the $1,100 which he is entitled to for his new dependent.


 

The Recovery Rebate is based on the number of people on the tax return, not specific individual people. 

So there is no credit "for his new dependent", there is just a credit for a dependent on his tax return, and he already received an amount equal to that credit.  So your taxpayer already received the full amount they are eligible for.

ddortiz
Level 2

Thank you all.