Interesting Situation with the new Economic Stimulus Act

[Mike Mac]

Thanks for the update. After reading it a fairly common scenario crossed my mind and wondered if you folks know how it will be handled under the act.

A parent claims a child as a dependent on their 2007 return. They mee all the qualifications and get an extra $300 for the dependent. In 2008 the child no longer qualifies as a dependent and files claiming themselves. Are they allowed to get the
$600 credit (if they meet the other criteria) in 2008? It appears the parents get to keep
the extra $300 they got in 2007 but nothing was mentioned with this fairly common circumstance in the update.

Thanks,

Mike

[Gretel]

The way I understand it child will qualify for the credit in 2008. It would get real messy and in quite some cases impossible if things like this need to be kept track off.

[Bees Knees]

There is no rule that says they cannot be a dependent of another taxpayer in 2007. The only rule on the subject says they can't get the credit if they are a dependent of another taxpayer in 2008. So the answer is, yes, a child who is a dependent of his or her parent in 2007 can get the credit in 2008 if he or she is no longer a dependent in 2008.