Dependents have filed a joint return

[NotEasy]

Client inquired if he could claim his parents as his dependents in 2011. I went through the requirements with him. His parents fulfill all the requirements except they have already filed a joint return already. Based on their income, they are not required to file a tax return. I am guessing the only reason is they filed the return for tax refund of their withholding from work (The father did work a little bit at the beginning of last year).

So, I think they do not pass the joint return test now. Is there a remedy for it? I think it is very unfair for the taxpayer not being able to claim his parents just because his parents have filed a tax return for a refund when they are actually not required to do so.

[Possi]

Income?

What was their income?

[Will]

So, I think they do not pass the joint return test now.

A person cannot be treated as a dependent if he or she filed a joint return with a spouse. This rule does not apply if the joint return was filed only as a claim for refund and no tax liability would exist for either spouse if they had filed separate returns.

[David1980]

Assuming the taxpayer really does provide over half the support for his parents (counting social security if received as support provided by the parents), the remedy would be for the parents to amend the return and not claim their own exemptions (with income low enough taxpayer could claim them it won't affect them anyway) and then file the taxpayer's return by paper (since it won't go electronic.)

[Gary2]

I am guessing the only reason is they filed the return for tax refund of their withholding from work (The father did work a little bit at the beginning of last year).

Don't guess. Ideally, you need to see their return and determine if they have a tax liability if they had filed MFS, without claiming their own exemptions. If the answer is no, then check to see if their joint return was only to claim a refund (i.e., no senior credit, etc.), and what the result would be if they didn't claim their own exemptions.

There are three possibilities:

1. Their return qualifies as is (unlikely).
2. Their return would qualify and be worth it if they amended to remove their own exemptions.
3. Their MFJ return can't possibly qualify, but they have until April 17 to amend it back to two separate MFS returns, and it's worth it.

[dan doshan]

I am with Possi in being curious as to the parents income. Often when determining support one, including the client, does not factor in the fair rental value of the parents home if they own one. While certainly not impossible, I think that in most cases when clients want to claim their parents they just can't meet the support test when you really delve into the numbers. It's just not that easy of a hurdle to overcome.

Also, if the parents file separately, if one or both get SS I beleive most of the SS would be subject to tax which in and of itself may subject one or the other to a tax liability.

[NotEasy]

A person cannot be treated as a dependent if he or she filed a joint return with a spouse. This rule does not apply if the joint return was filed only as a claim for refund and no tax liability would exist for either spouse if they had filed separate returns.

Suppose the parents are really filing for refund, how do I make the e-file system accept the tax return of the son if he claims the parents? I don't think the system can distinguish the tax return filed by the parents is solely for refund or not.

[NotEasy]

[*]Their MFJ return can't possibly qualify, but they have until April 17 to amend it back to two separate MFS returns, and it's worth it.[/list]

I know if a married couple has already filed a joint return, they cannot go back to amend their tax return to file separately. But can I take what you said to mean that they can still amend their tax return from filing jointly to filing separately if they do it before the due date of the current tax year?

[Lion]

Yes

Yes but I need 10 characters to post...

[Gary2]

Suppose the parents are really filing for refund, how do I make the e-file system accept the tax return of the son if he claims the parents? I don't think the system can distinguish the tax return filed by the parents is solely for refund or not.

If the parents did not claim their own exemption, then I believe it will be fine. Make sure they didn't claim any credits. As far as I know, the e-file system won't reject the son's return because of the joint return test. If I'm wrong, then the son will have to file on paper.

If the parents have already claimed their own exemption, they will have to amend their return first. The son can e-file now without claiming them and then amend to claim them, after their amendment has been processed. He could, in theory, file on paper now claiming them, and wait for the letter asking for proof - but I don't recommend that. He could also file for an extension, wait for their amendment to be processed, and then file his original claiming them; it will almost certainly have to be on paper, but at least it's unlikely to generate a letter asking for proof.

[thomtax]

I know if a married couple has already filed a joint return, they cannot go back to amend their tax return to file separately. But can I take what you said to mean that they can still amend their tax return from filing jointly to filing separately if they do it before the due date of the current tax year?

My understanding is that any "amended" filed before the filing deadline is handled as replacing the first filing for the year and is not handled as an ordinary amended.

And, an electronic filing will never be allowed even after they change their return. Once the parents return is in the system, it will cause the person claiming the parents to have to file by paper.

LT

[taxea]

Suppose the parents are really filing for refund, how do I make the e-file system accept the tax return of the son if he claims the parents? I don't think the system can distinguish the tax return filed by the parents is solely for refund or not.

If he qualifies to take them and their return is amended to show that they are the dependents of someone because the original return has already been filed you cannot efile the son's return.

If their return is corrected before the filing deadline you don't need to do an amended, just write corrected return across the top. And....I would advise the son not to file his return until the IRS has a opportunity to input the corrected return of his parents. You will have to call the IRS hotline in 6-12 weeks to determine whether the return has been posted to their records.

[NotEasy]

If the parents did not claim their own exemption, then I believe it will be fine.

Is it possible to file a joint return without claiming their own exemptions? I have always thought exemptions of the taxpayer and spouse in a joint return have to be claimed by default.

[Gretel]

Is it possible to file a joint return without claiming their own exemptions? I have always thought exemptions of the taxpayer and spouse in a joint return have to be claimed by default.

There should be a box to check in your tax software that t/p are claimed as dependents on someone's else return.