Step-grandson -- how complicated is this?

As one of those volunteers I can assure you they're well trained, and they've seen just about every kind of family situation you can imagine if they've been at it for any time.

The rules for determining dependency are in IRS Publication 501. It's not dealer's choice. Either he can be claimed by his father or he cannot. If his father can claim him he can't claim his own personal exemption even if his father doesn't claim it.

I'm not sure whether you were talking about only him regarding the Earned Income Credit or also his father. As you note, he's not eligible, but if his father is and the son was a qualifying child for EIC, it could be to the father's advantage. Note that he could be a qualifying child for EIC even if his father can't claim him as a dependent. Those rules are in the 1040 instructions.

It would be best for all concerned if he and his father discussed this, but you know the family dynamics. If it's best for them not to talk right now, he can go ahead and file according to the rules. The downside is that if he and his father file conflicting returns, the IRS will be in touch with both of them to resolve it.

See "family dynamics" above, but I wouldn't get in the middle of it on a bet. Send him to a clinic if he won't talk to his father about it.

If your grandson provides over 1/2 his own support then his father is NOT eligible to claim him as a dependent.

"Charles Packer" wrote

He's not old enough to participate in EITC,

Maybe. The facts and circumstances would dictate if he's a dependent of someone else.

Maybe they would. If "father" provided more than half his support for the year, then "father" can claim him. If "father" didn't provide more than half his support for the year, then.....maybe he's not a dependent.

Does he live with you? Maybe you are providing more than half his support. If not for 2008, then maybe for 2009.

Dig around some more about the dependency rules to see where he falls for

in article snipped-for-privacy@c36g2000yqn.googlegroups.com, Charles Packer at snipped-for-privacy@cpacker.org wrote on 3/19/09 3:01 PM:

So the first question is where did he live and for how long and the second is who provided his support?

Uncompensated advice guaranteed correct or double your money back

Frank S. Duke, Jr. CPA Cincinnati, OH USA

This is incorrect. The support test for a qualifying child is whether the CHILD provided more than half his own support.

See Publication 501.

No, he lives alone. He lived with his father until Sept. of last year, so I presume he could be claimed as a dependent by his father. Incidentally, I'm claiming his mother as a dependent. Don't tell me I could have claimed him through his mother! It's too late; I've already filed.

At this point, what I want to know is this: what are the mechanics of claiming a dependent when said dependant has worked and has a W2? I can't recall anywhere seeing instructions on that say "attach dependents' W2 here..."

-- Charles Packer

We're back to his support. The question is whether your grandson provided more than half his own support for the year. If he did, he's nobody's dependent and claims his own personal exemption. If he didn't, only his father (or possibly someone else living in that household more than 6 months) can claim him. (I'm assuming his parents don't live together.)

W-2 income is reported on only the return of the person who earned it. That includes dependents.

Since he is under age 19 on December 31, how much he actually earned has no bearing. What he did with his income (i.e. put towards his support or not) does.

...and he didn't pay for more than half his support, I'm sure. His father certainly can claim him. So I'm sure I can correctly tell grandson: Ask your dad to claim you, then you won't have to pay those taxes I calculated that you owe because you foolishly didn't let your employers withhold enough. But then he's going to say: How do I get back what _was_ withheld? And all I can say at this point is: I dunno...maybe it's up to your Dad. True?

-- Charles Packer

No, Dad can claim Son, but Son still has to file a return, report his own income, and pay tax on that income. In fact, Son's tax amount will be greater because he can't claim an exemption for himself.

...

And OP can instead tell grandson "welcome to the real world", huh!!??? :)

Interesting. Yes, I re-read the rules on who must file and I see that he has to file...and line 6a says "If someone can claim you as a dependent" you can't claim the exemption for self. This is fundamentally unfair to anybody in grandson's position. the father benefits by claiming him as a dependent, and he has to pay "extra" for not being able to exempt himself. There seems to be an assumption here that the father will make it up to his son somehow.

-- Charles Packer

Charles Packer wrote: ...

... One might say he already has by contributing more than 50% of son's annual support...

You mean that, in effect, the son is assuming the tax burden for the time his father was supporting him? But he wasn't working while living with his father, and we typically don't think of a non-working juvenile as owing anything to his parents.

On recomputing his tax without the exemption for self, I find that, at his low income level, it doubles his tax, and this seems to be unfair. In fact, I'm going to urge him to have the returns looked over by one of those tax clinic volunteers to make sure I haven't missed something.

-- Charles Packer

...

"Fair" has little to do w/ IRS Code... :) (or :( perhaps?)

I tend to agree that underage working kids get short shrift on some of the provisions as compared to adults--perhaps that's intentional in the Code to try to convince them they ought to stay in school.

We do typically think of such children as at least owing their parents the dependent exemption on the parents' annual taxes, as long as said children live at least six months with a parent and the parent provides over half the child's support blah blah.

Where would this boy have lived and how would he have fed himself had his father not supported him for some six months in the tax year in question? No fair interjecting that the father stunk because of this or that. Did the father provide food and shelter to keep the boy alive and without breaking the law?

One more time: to determine whether a child can be claimed by anyone as a dependent, it is COMPLETELY IRRELEVANT whether the parent (or other potential claimee) paid more than half of support. All that matters is that the child did not pay more than half of his OWN support.

Support is independent of income. Funds for support can include savings, loans, gifts, inheritances, wages, investment income, illegal income, and nontaxable government aid. What matters is what did it cost, and who paid it.

I expect my kids to mow the grass and take out the garbage, at minimum.

I wonder what the VITA appointment schedule looks like these last three weeks before filing deadline...but your step-grandson surely can file an extension request without anyone's assistance.

While you're at it, you better check to see if you are actually entitled to claim your adult daughter as your own dependent.

-Mark Bole

Mark Bole wrote: ...

... I had thought the discussion had moved past the determination at that point -- I was speaking to the philosophical question at that point...

But, if the dependent is 50%. :)

Here from OP's posting the father seemed the likely candidate. That isn't the specific wording/requirement of the IRS code, granted, but that wasn't intent here.

Stepdaughter, actually. I paid her rent at various rehab centers and halfway houses, certainly more that she received in food stamps.

-- Charles Packer