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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
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Experience:  15years with H & R Block. Divisional leader, Instructor
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My daughter turned 18 September 2015 and at that time she

Customer Question

My daughter turned 18 September 2015 and at that time she started receiving disability checks will I still be able to get Earned Income Tax Credit on her?
Submitted: 10 months ago.
Category: Tax
Expert:  Christopher B, Esq. replied 10 months ago.

My name is***** and I will be helping you with your question today. This is for informational purposes only and does not establish an attorney client relationship.

In order to ascertain if your daughter is still your dependent the following have to be true: 1) You can’t claim your daughter if she takes a personal exemption for herself or claims another dependent on her own tax form 2) Your child must be under age 19 or, if a full-time student, under age 24. There is no age limit if your child is permanently and totally disabled 3) Your child must live with you for more than half the year, but several exceptions apply 4) Your child may have a job, but that job cannot provide more than half of her support (this is doubtful if she is fully disabled) 5) You must be the only person claiming them. This requirement commonly applies to children of divorced parents. Here you must use the “tie breaker rules,” which are found in IRS Publication 501. These rules establish income, parentage and residency requirements for claiming a child.

So without having more information (you can look at the factors), you should be able to claim your daughter as a dependent as long as she continues to live with you beyond age 18 if she is fully disabled (you don't have to meet the support test for the EIC). You can still receive the Earned Income Credit for her as long as you meet the eligibility factors for the credit (including income).

See think for IRS for "qualifying child": https://www.irs.gov/uac/A-%E2%80%9CQualifying-Child%E2%80%9D

"Earned Income Tax Credit — a qualifying child does not have to meet the support test. Also, a qualifying child must have lived with the taxpayer in the United States for more than half the year and have a social security number that is valid for employment in the United States. A qualifying child is determined without regard to the exception for children of divorced or separated parents. If a qualifying child is married, he or she must also meet the marital status and nationality tests for a dependent."

Please let me know if you have any further questions and please positively rate my answer as it is the only way I will be compensated for my time by the site.

Customer: replied 10 months ago.
Do I have to report the amount of her disability income ?
Expert:  Christopher B, Esq. replied 10 months ago.

The amount for the Earned income tax credit? No that is a credit for your taxes.

Expert:  Christopher B, Esq. replied 10 months ago.

oops I read that wrong.

If your dependent child receives more than $950 in taxable unearned income, including Social Security benefits, she must typically file an annual tax return to report the income to the IRS and pay any tax she owes. In most cases, dependent children must also file tax returns if their earned income exceeds $5,950 or if the total of their earned and unearned income exceeds $6,250. However, these limits are slightly higher for children who are blind.

If your child receives Social Security benefits and is required by law to file a tax return, she must do so in her own name. Although you can file the return on her behalf, you cannot claim the child's taxable income on your own tax return. If you choose to file on your child's behalf, you can sign the return and handle any related communications with the IRS. If neither you nor your child files, the IRS will hold your child responsible for any owed tax or penalties related to the return, unless the child is unable to file her own return because of age or disability.

Supplemental Security income is never taxable. Although most children won't owe tax on more than 50 percent of their benefits, a child may owe tax on up to 85 percent of her benefits if the sum of one-half of her benefits and her other taxable income is more than $34,000. A dependent child may also owe tax on more than 50 percent of her benefits if she is married, files a return separate from her spouse and lived with her spouse at any time during the tax year.

Customer: replied 10 months ago.
She can not work at all and didn't start getting disability til Oct 2015 and I only made 25,000 for 2015, so can I get the earned income credit for her and since she is totally disabled why does she have to report the income, she has never worked a day in her life.
Expert:  Christopher B, Esq. replied 10 months ago.

You will get credit for her as a dependent and it should qualify you for the EIC. Like I said in my previous answer, "If your dependent child receives more than $950 in taxable unearned income, including Social Security benefits, she must typically file an annual tax return to report the income to the IRS and pay any tax she owes." So you or her would need to file the tax return in her name only. It is not because of any income earned, it is the social security she received that that amounted to over $950. Understand she will not be taxed 50% of her benefits buy only half of her benefits would be taxed at 15% (the lowest tax bracket). It should be a very simple filing.

Please let me know if you have any further questions and please positively rate my answer if satisfied. There should be smiley faces or numbers from 1-5 next to my answer. This will cost you nothing extra and the extra step will insure that I will be compensated by the site for my time. Thank you in advance.

Customer: replied 10 months ago.
Okay so I will claim her on mine, so what form does she need to file seperately for solely reporting disability income ?
Expert:  Christopher B, Esq. replied 10 months ago.

Each year the SSA will provide you with a form SSA-1099. This form will tell you how much money you received from the SSA in Social Security Disability benefits. You will use this form to fill out your income tax return.

(1) All taxpayers who are claimed as a dependent on someone's tax return are subject to different IRS filing requirements, regardless of whether they are children or adults. Since a dependent is unable to claim their own exemption, a tax return is necessary when their earned income is more than the standard deduction for a single taxpayer, which in 2015 is $6,300. However, the threshold decreases to more than $1,000 when the dependent's income is unearned.

(2) Put the total amount of your Social Security benefits on line 20a of IRS Form 1040.

(3) Complete a "Social Security Benefits Worksheet" which is available in the Instructions for IRS Form 1040 on page 26. This form will determine whether or not you have to pay taxes on your Social Security benefits.

(4) Write the amount of taxable Social Security benefits obtained in step 4 on line 20b of your 1040.

(5) Fill out the remaining portions of IRS Form 1040 and submit it to the IRS per instructions on the form. If you owe taxes and are unable to afford the full amount, contact the IRS to arrange a payment plan.

Please let me know if you have any further questions and please positively rate my answer if satisfied. There should be smiley faces or numbers from 1-5 next to my answer. This will cost you nothing extra and the extra step will insure that I will be compensated by the site for my time. Thank you in advance.

Customer: replied 10 months ago.
I don't get ssi only she does
Expert:  Christopher B, Esq. replied 10 months ago.

I understand, I did that so she could fill it out but you can as well. The directions remain the same.

Customer: replied 10 months ago.
Think I'll go to H&R Block instead of using turbotax , thanks for the info.
Expert:  Christopher B, Esq. replied 10 months ago.

No problem, could you positively rate my answer? There should be smiley faces or numbers from 1-5 next to my answer. This extra step will not cost you anything extra and this will ensure that I will be compensated for my time by the site. Thank you in advance.

Expert:  Robin D. replied 10 months ago.

Hello

If the only amount your daughter received was SSDI she does not have to file a return.

You can claim her as a dependent as long as the SSDI she received was not more than half of the total support she needed for the year.

She is not required to file a return if she only received SSDI.

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