Stimulus payment

[lovesledz]

I have a client that received a $1400 stimulus payment in March 2021, for their daughter who was a college student & their dependent in 2020. The daughter graduated in 2021, got a job and will file her own 2021 return. The parents gave the $1400 to the daughter, but I'm not sure how to reconcile this on their 2021 returns. It seems to me that the daughter can't indicate that she received the payment, because the IRS will think the parents kept a payment for someone that wasn't their dependent. And the daughter can't indicate that she didn't receive the payment, because that will generate a credit on her return that she is not entitled to. Neither the parents or the daughter has filed their 2021 return yet. Do the parents need to return the payment to the IRS so the daughter can claim it? Any suggestions on how to deal with this?

[ATSMAN]

Only in America!. The daughter can file a 1040 (not claimed by parent) for 2021, indicate that 0 stimulus received and she will get another check. Parents may or may have to give any money back to IRS.

[Lion]

If the daughter graduated in 2021, was in college for any part of five months, do the parents meet all the requirements to claim their daughter as a dependent for 2021? The most usual sticking point for a recent graduate is -- did the graduate provide more than 50% of her own support?

[lovesledz]

Although the daughter graduated in 2021, she still lives with her parents. My gut feeling is that the parents probably do qualify to claim her as a dependent, but the daughter wants to file her own taxes and the parents want to honor her wishes. I will be filing the parents return, but not the daughter's. I don't have the information to determine if the daughter has provided more than one-half her own support. As to the stimulus question, the daughter will indicate on her tax return that she has not received the stimulus payment, but will also indicate that she is not claiming it on her return.