Claiming Married Child - checking myself

[jasdlm]

Taxpayer and spouse married in 2018.  I filed the joint return (both were college students for part of the year), claimed education credits, etc.  Joint income of over $70,000.  

The return rejected because one of the spouses, the one who made less, was claimed by the parents because parents paid tuition and wanted to claim AOTC AND paid preparer told them they could claim the child, and the married couple would just have to file married filing separately.  Income by that spouse was around $14,000.

Parent is unwilling to amend return.  Says couple will have to file MFS.  Can I legit do that?  The pub says that the married couple has to be filing only to claim refunded withholding or estimated taxes paid.  Can one even file MFS without claiming oneself?

As I reread the pub, it is talking about the rules for a Joint return, which MFS would not be.  I guess maybe the clients can file MFS and just not claim the already claimed spouse?  I can't find something specifically on point, and I have not had this situation before.

Thanks in advance.  

 

[Pacun]

Send them to HRB and sleep well.

I wouldn't do that return because one of the spouses was claimed wrongly.

[Lion EA]

If the married kids file MFS and the potential dependent otherwise qualifies, then the potential dependent still qualifies to be a dependent of her parents.

If the married kids file MFJ but have NO filing requirement, file only to get a refund of their withholding, then the potential dependent still qualifies to be a dependent of her parents. (NOT your scenario.)

If the married kids file MFJ because they HAVE a filing requirement, then the daughter does NOT qualify to be a dependent of her parents.

The parents can file withOUT their daughter as a dependent. OR, the married kids can amend their MFJ return to MFS for both, and children and parents mail in their returns.

Or, as has been suggested, you can send the whole family to HRB and move on to more appreciative clients!

[jasdlm]

Thanks to both of you!  Lion, just to confirm, are you saying in your first sentence that if the parents contributed more than 50% of her support then they can file MFS even if daughter has a filing requirement?  The kids definitely have a filing requirement, as you mention in your 3rd point, but I don't have the information to do the calculation for 50% of support.  I think the kids actually lived together all year, and parents paid tuition, but I'm not positive.  I might have to investigate further IF I'm understanding your post correctly.

Thanks much.

The spouse with hire earnings has been my client for years, as have the parents and grandparents.  The 'dependent' spouse is new to me.

[Lion EA]

If the daughter did NOT pay more than 50% of her own support and meets the other requirements to be a qualified dependent of her parents AND files MFS, then the parents can claim her.

If the daughter files MFJ, then the parents can claim the daughter if the filing was ONLY to get back their withholding. But, that's not the case described in the OP.

The parents would ALWAYS have to state to you (and show you, if you had reason to doubt them) that their child did NOT pay more than 50% of her own support, and that has nothing to do with being married. If a three-year-old child actress supports herself more than 50%, then the parents can NOT claim that little darling.

Yes, you can file the daughter MFS. But, you say she wasn't your original client? Who IS your client? If the "kids" that got married are your clients, advise them what's in their best interest, which often is MFJ. If the boy's parents are your clients, it doesn't matter. If the girl's parents are your clients, then advise them what's in their best interest, which might be to claim their daughter. If more than one of the parties are your clients, then you have a conflict of interest. Disengage from one or all of them. It's a family matter. If the family works it out and you still want to keep one or more of them as your clients, then do what's in YOUR best interest. Until the next family feud.

See Pub. 17 pages 28 and 30 for Joint Return Test and page 29 for Support Worksheet.