Bizarre Recovery Rebate

[Nashville]

MFJ taxpayers claimed a 19-year-old college kid in 2007, total 3 dependents. No phase-outs.

In 2008, college kid got a girl pregnant, and the baby is now living with his parents in their home. College kid moved to a nearby town within driving distance and got a decent job.

Same taxpayers can no longer claim their son, but I did tell them they could claim the grandchild as their dependent.

Now an extra $300 is popping out on the RRC line. Research tells me that they were entitled to only $1200 in 2007 and $1500 in 2008. However, they claimed 3 exemptions in 2007 and 3 exemptions in 2008.

Anyone have any idears how this could happen??

[dkss]

in 2007 the college kid was too old to qualify the parents for the $300 extra child payment, but in 2008 the grandchild qualified for the extra $300 RRC.

[Nashville]

Yes, but

I wonder how they knew. Taxpayer has never electronically filed, and DOB are not required on a paper return...

[JohnH]

I think the system links DOB to the SocSec #, doesn't it? I'm almost certain that a few years ago I claimed a child tax credit for a 17-year-old on a paper filed return because I had the wrong birth year in my files, and the IRS corrected the return.

[Nashville]

Good answer

Excellent answer, guys. I've often wondered why DOB is not required on a paper return. If the SS# drives their data, it would be unnecessary anyway.

Mystery solved, I supposed. Thanks.

[David1980]

Also, qualifying for the $300 for a child is based on if they qualify for child tax credit. So you do send in the little check mark in the CTC box.

But yes, they do have the date of birth, date of death, etc., in their own records. Which is why if you mark the box for child tax credit for a 17 year old it gets rejected with a reject code 370.

[Burke]

I think the system links DOB to the SocSec #, doesn't it? I'm almost certain that a few years ago I claimed a child tax credit for a 17-year-old on a paper filed return because I had the wrong birth year in my files, and the IRS corrected the return.

Yes, it does. I had one on which we claimed the CTC and it rejected as SSA records showed child too old by one year. Turns out child was born in early Jan and hospital and/or parent must have put previous year down 16 years earlier when they applied for SSN, so SSA records were wrong. Mother had to take birth cert down to SSA to get their records corrected, then we filed 1040X for CTC.