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Tigerfan56
LSU Fan
Member since May 2010
8072 posts

Do you have to claim dependents on your tax return?
I’m a CPA (not in public, haven’t prepped a tax return in years nor am I up to date with the tax code) helping my dad with his tax return.

My sister is in college and meets the requirements to be claimed as a dependent. But my father has too much income to receive and child tax credit for her, or any education tax credits for her.

I suggested that my father not claim her, so that my sister can then claim the American Opportunity Tax Credit, which my father is phased out of receiving. Per my reading of the AOTC requirements on the IRS website, if she is not claimed as a dependent she could claim this. Also, my understanding is my father gets no benefit for claiming her. I cannot find anything that says you MUST claim a dependent if they meet dependent eligibility requirements. Am I missing something, or can my sister claim the AOTC while my father’s tax situation is completely unchanged?


LSUFanHouston
LSU Fan
NOLA
Member since Jul 2009
19276 posts

re: Do you have to claim dependents on your tax return?
For not being in public, you are really spot on here.

The rules are for what you must meet to be able to claim a dependent. it's not mandatory you claim a dependent for which you meet the rules.

Back in the old days (i.e. pre-2018) when we had personal exemptions, between those exemptions phasing out, and those taxpayers who were thrown into AMT (where personal exemptions don't count), we had a few clients that got no net benefit of the dependency exemption.

Some of those clients had kids that were in college. We would haven them file their own tax return, and take the AOTC on their return.

Now, pre-2018 days, they could not claim a personal exemption for themselves (because, again, only the parent met the eligibility, the kid did not) and in many cases, kiddie tax issues came into play. But they could absolutely take the AOTC.

Under today's law, there is no personal exemption, and if you do this, the kid can't claim any family tax credit for herself, but yes, she can claim AOTC.

Great idea. Congrats on that thought.


Tigerfan56
LSU Fan
Member since May 2010
8072 posts

re: Do you have to claim dependents on your tax return?
Thanks for the response and explanation


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hottub
Florida State Fan
Member since Dec 2012
1219 posts

re: Do you have to claim dependents on your tax return?
How old is she?

Only thing I can think of that may be an issue is if she is still on his health insurance as a dependent.

But I’m not an accountant and only thinking out loudly.


Tigerfan56
LSU Fan
Member since May 2010
8072 posts

re: Do you have to claim dependents on your tax return?
quote:

Only thing I can think of that may be an issue is if she is still on his health insurance as a dependent.


I don’t think this matters. At least I hope not, or else it means I did my taxes wrong when I was fresh out of college . I was living on my own, working full time, and claimed myself as a dependent around age 24 but I still stayed on my dads health insurance until I was 26 because it was such a better plan than my employer offered.


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EA6B
Navy Fan
TX
Member since Dec 2012
9798 posts
 Online 

re: Do you have to claim dependents on your tax return?
While divorced I was responsible for my kids health insurance and other expenses, but did not claim them as dependents. I can’t see the IRS ever having a issue with something that results in more taxes collected.


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