stimulus payments situation

[Safire]

Client has 2 children who receive over 10k each in ss benefits from their deceased father. I did not use them as dependents on the return, because they did not provide more in support than the children received in benefits. In fact part of the money is used for the entire family.

Client gets the forms to fill out for the children to receive the stimulus payments, calls me, I told her to call IRS to be sure they would qualify, because I was not sure.

Someone in the IRS tax law department told her that no matter how much they got in SS benefits, she should be claiming them as dependents. That they could not fill out the 1040a and get the $300 each because they were eligible to be on her retrun.

Am I missing something? Seems like I remember something about a form to claim CTC when you cannot claim an exepmtion for a chid???

[Larmil]

Support test

Client has 2 children who receive over 10k each in ss benefits from their deceased father. I did not use them as dependents on the return, because they did not provide more in support than the children received in benefits. In fact part of the money is used for the entire family.

Client gets the forms to fill out for the children to receive the stimulus payments, calls me, I told her to call IRS to be sure they would qualify, because I was not sure.

Someone in the IRS tax law department told her that no matter how much they got in SS benefits, she should be claiming them as dependents. That they could not fill out the 1040a and get the $300 each because they were eligible to be on her retrun.

Am I missing something? Seems like I remember something about a form to claim CTC when you cannot claim an exepmtion for a chid???

If the children's SS benefits were used for support they are considered support provided by the CHILDREN.

[fliszt]

Unless things have changed,

are not children's social security income to be excluded on the parent's tax return and the parents still claim the children as dependents (providing they meet other elgibility guidelines). I have a family where dad is on s/s disability and all 4 kids have s/s income. Mom is only one that works. I do not include kids s/s income on return and all 4 kids are listed as dependents. And I bet mom and dad use the kid's s/s for part of the expenses. And they are elgible for the rebate pkg.

[Burke]

You do not include the childrens' social security on the parents' tax returns; the children would claim it on their own returns if they actually had enough income to file one.
However, it is my understanding that the support test still has to be met to claim the children. You don't claim them just because they are your kids, minors or not. I once had to explain this to a very irate lady who made about $4,000 in income, and was on welfare, as to why she could not claim her 4 children. Today it would not matter due to increased standard deduction, but back then she owed taxes.

[Safire]

Yeah, I have never seen where it was stated that SS for a child should be considered different than say SS for a parent, we all know that you have to provide more than half for a parent and that parents SS is considered spent for their own support.

This actually makes twice that the IRS has told this lady that she should be claiming her children as dependents, she questioned it last year when I did not list the children on her return. Last year the3 income was so low that it did not matter, there are 2 other children that qualify them for max EIC and there would have been no attitional CTC.

This year it does matter because of the extra $300 per child, I'm sure her confidence in me has to be shaken at this point and understandably so thanks to the IRS.

[Safire]

And add insult to injury, my computer crashed this morning and I have spent all day just getting back online and restoring my returns, I have lost an entire day.