IRS reference that says a parent cannot "let" their college age child file as non-dependent?

Question

Hi all, I'm looking for a direct reference to IRS publication that explicitly says a young adult cannot file as a non-dependent if their parents CAN claim them, even if the parents choose not to claim them.

I'm in a debate on another forum where people are discussion taxes - specifically the stimulus payments. There is an individual on that thread who claims to be a tax professional and is advising people not to claim their college age children this year so that the young adult child can file independently on their taxes and get the $1800 worth of stimulus credits.

For example one person said they have a 19 year old daughter who lives at home, attends a local college full time, and works part time. Normally the parents would still claim their daughter as a dependent. But the person who claims to be an experienced tax accountant is advising them NOT to claim their 19 year old daughter on 2020 taxes, so that the daughter can file her own taxes as a non-dependent. Thus the parents lose the $500 credit for "other" dependents but the daughter will get $1800 from the stimulus programs.

I'm fairly certain that person is wrong, and what they're advising people to do is illegal. But I want to be able to link directly to an IRS publication, quote an exact line which says this is prohibited. Thanks in advance.

StephenWeinstein · Answer

Technically, you are right.  However, although following the advice would be illegal, I'm not sure how the person would get caught.  It may be that the person is giving advice as to what a person can get away with doing, not as to what is actually allowed.  Like telling someone to drive 4 mph over the speed limit.

Anonymous · Answer

A footnote.  This does NOT apply to any refundable credit, including the EIP stimulus payments.

A parent can choose not to claim a dependency.  For a student, this means they can claim the nonrefundable portion of the American Opportunity education Credit on their return.  They must still indicate their parents can claim them.

Slickterp · Answer

There is no "let".  If you qualify as a dependent, you cannot claim yourself, even if your parents do not.

https://www.irs.gov/individuals/understanding-your-cp87b-notice - right from the IRS site.  "You can't claim yourself is someone else is entitled to claim you as his or her dependent"

STEVEN F · Answer

What the law says is that in any given situation, a person either qualifies as a dependent, or they don't. What the taxpayer wants doesn't matter.
You need to look at the rules for determining if you qualify as your parent's dependent or not.

Note: The question on the daughter's return asks CAN anyone claim you as a dependent, not if anyone does. Signing the return declares under penalty of perjury, that everything on the form, including that answer, is true.

Eva · Answer

It's in Publication 501 on the IRS website.  Dependent info starts on page 10.

Anonymous · Answer

"IRS reference that says a parent cannot "let" their college age child file as non-dependent?"

There is nothing obscure about the reference you're seeking.

Here is the exact wording on Form 1040 in the Standard Deduction section:

"Someone else can claim you as a dependent" (and then there's a box to tick if this is true).

Nowhere does it ask IF someone else is claiming you as a dependent.   It asks if someone else CAN claim you as a dependent.    If someone else CAN claim you, you would be filing an incorrect tax return if you don't tick the box.

As far as the economic impact tax credits go ("stimulus payment"), a person is not eligible IF someone else can claim them as a dependent.    Whether they actually ARE claimed on someone else's tax return is irrelevant.

In practice, the IRS doesn't really care whether the parent claims the child or the child files as independent.  As long as both parent and child aren't claiming an exemption for the same person, the IRS probably isn't going to flag it.   That is why you often hear a lot of discussion about kids "letting" their parents claim them or vice-versa even though it's not technically kosher.

IRS reference that says a parent cannot "let" their college age child file as non-dependent?

6 Answers