Claiming a full-time student qualifying child as a dependent for CTC and AOTC

[JJV]

Prosseries is not allowing a parent to claim a full-time qualifying child age 20 as a dependent due to gross income limitation. Child had gross income of $5,000, but that limitation applies to "Other dependents, not qualifying children. Program error?

[Terry53029]

On the federal info worksheet what code did you put for child in section 3, and what did you put for time lived with TP  

[IRonMaN]

Sounds like a case of pilot error.

[JJV]

Terry,

In response to your Q, In the Federal Info Worksheet Section 3, I have code "L" for dependent child who lived with client.  And nothing in the box for (months) Lived with taxpayer in the US.  So on Review it comes up with zero errors but I cannot mark it as "ready to Efile"  and the message comes up about a dependent gross income limitation exceeding $4,400.  I tried different permutations but with the same result.

If you know about Pilot error then please enlighten me.

Thank you for your prompt reply.

JV

[Taxprohere]

Are you talking about the parent's return or the child's return?  If parents, why are you putting in the child's income?

[JJV]

Its odd - the Child's income is not entered in the parents' return and I do not know how it is picking it up except that it might be accessing it cross-file withing Proseries.  That seems doubtful and am wondering if there is a checkbox question about the child's income in the parents' return.

The parents' are income eligible for the AOTC and CTC.

[BobKamman]

Are you sure you have the "child" date of birth correct?

[IRonMaN]

The income limitation note is a standard heads up item when you run the review feature.  Why don’t you have anything in the months lived with taxpayer box?  Time in college counts as living with parents.

[PATAX]

@IRonMaN 👍 it is not a program error and Pro Series does not interface the parents return with the child's return. Something was not entered correctly on the parents worksheet. Have done many returns like this and have never had a problem including this year.

[JJV]

IRonMAn,

I see now that the message is a heads-up.  The parents' child is age 21 and a full-time student.  The gross income if the child does not matter but it happens to be $5,000.  So it seems its entered correctlt as it passes the Review with zero errors.  Its not letting me mark it "Ready for e-file".  It seems to be an efile issue for some reason.  I did enter the 12 months. for lived with parents per your suggestion but will circle back to check that does not cause an issue.

Thank you,

JV

[JJV]

PROBLEM SOLVED INDEED PILOT ERROR, MY FAULT.

The heads-up message following the error checking to zero saying to claim the child (21 year old) as a dependent the (ie "qualifying") child must be a being a full-time student or (the "other dependent") have gross income less than $4400 really threw me off.  

I think the error was an e-file issue unrelated to this.

I believe its solved but we covered the distinction between a dependent qualifying child and other dependent.

Thank you all for your support - I really don't know if I would have figured it out without your input and it could have cost the client lost credits.

Yours truly,

JV

Viva IAC !!!

[PATAX]

Viva Christoforo Columbo!!!

[rbynaker]

How do you get CTC on a college student?

[JJV]

rby,

In response to you Q about how a qualifying child dependent full-time student age 21 gets the CTC, assuming parents meet the income limitation, they don't.  They are eligible for the $500 "additional" CTC for other dependents.  So complicated.  (sidebar: Am I the only one who often wonders if we no longer have responsible stewards of our tax code and system?)

Thanks for asking.  to you and all, I hope you have a good finish to your season!

JJV 

[BobKamman]

@JJV  "we no longer have responsible stewards of our tax code and system"

As if we ever did.  Or are you saying you miss Wilbur Mills?  Well, OK, we have traded Fannie Fox for Stormy Daniels.   

[JJV]

BobK.

That's funny and wise.  My comment is not intended to be political.  I'm old enough to remember when tax preparers had a voice and there was push-back to tax code changes that were not sensible to administer, comply with, and enforce.  The practitioner community has been steam-rolled from the early 90's (anyone remember the tax law changes made to cap gains made retroactive to the prior year?) and accepts whatever is served to them. There are many more recent examples.  When law changes happen at the end of the year none of us can properly plan, communicate, educate and inform clients and make good decisions.

After the 16th i will compose a brief paragraph about how late and unnecessarily complicated changes have directly negatively impacted our earning power as preparers with late and faulty1099 reporting if anyone is interested..

Best to all!

[PATAX]

@JJV 👍👍👍steamrolled is the perfect word. Please continue to leave your comments. We appreciate it. Thank you.