college students MFJ to MFS

In general, if the students in question would have had zero tax liablity and would have received refunds of 100% of their withholdings by filing married-separate and taking no personal exemption, then their respective parents can still claim the dependency exemptions.

I have no idea what, if anything, the existence of the advanced stimulus payment does to the general rule.

There might be a hint as to the IRS thinking from Notice 2008-05 which dealt with a qualifying relative who could not be a qualifying child of "any other taxpayer."

That notice answered the Cousin Alice and the twins dilemma.

(Cousin Alice took care of her twin 6-yr old cousins all year, and would otherwise qualify for dependency allowance and HoH based on them, unless S 152 meant that each twin was a qualifying child of the other.

If each twin is "any other taxpayer" under S152, then Cousin Alice is not allowed to apply the qualifying relative tests, and loses out.)

Notice 2008-05 said Any Other Taxapyer is NOT anyone who a) does not have to file, and b) files only to get a refund of federal witholding. One example in that notice is someone who doesn't have to file, but does file and gets EIC. Such a person IS any other taxpayer.

Your question also deals with S 152 and since filing results in a Stimulus rebate, not "Only to receive federal tax witheld" it is a hint that it will not fly here either.

I'm not too sure about that, Dick. Yes, that IS the general rule. But somewhere it seems that this has happened before, and IRS did allow the change, at least for the one half of the couple.

So if there were no tax liability especially, and even if there were, provided all the tax is paid and no balance due, it's worth a shot. But explanations should accompany all four tax returns.

ChEAr$, Harlan

p.s. check your mail boxes, Dick.

"Arthur Kamlet" wrote

snip

Pub 678, page 2-4, indicates that Alice would not qualify for HoH based on supporting her twin 6-yr old cousins. Do you believe otherwise because of Notice 2008-5? (Alice could take the cousins as dependents, though.)

Yes, you (and Pub 678 and everything else) are correct. This notice gets her the dependency allowance but not HoH.