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Adult son is dependent. Q on EIC & poss Medicaid benefit


jklcpa

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Taxpayer, a total enabler and pet peeve but story for another time, has 2 adult sons still living at home, ages 28 and 30.

One makes enough to not be a qualifying relative, is back to college, NOT contributing to the household finances, NOT any toward support of the other son.  No questions on this return.

The 2nd son should be her qualifying relative. I looked up fair rental of home for support worksheet, and the mom meets the support test by a long shot based on this alone without considering any other expenses she paid. This deadbeat son had $1,500 of gross income from wages and unemployment, no other sources of income or support.

Q1 - MUST mom claim the son?  She didn't keep any documentation or receipts for the support.  I know she could look up electric and utility bill payments and print those if needed.  

Q2 - I *think* is will create a problem with son's Medicaid coverage, and it should!  Delaware allowed Medicaid expansion & son is over 19. I think this means that if she claims him as a dependent, then her income is what Medicaid looks at as the "household income."  Is this correct?

Q3 - Deadbeat son is required to file based on gross income.  If she doesn't claim this son, his return would show a higher refund, but if I answer the 8867 question "can someone else claim this person as a dependent", then it knocks him out of a whopping $29 of EIC.  I'm not worried about that, but am about the ramifications of indicating that he CAN potentially be claimed by mom but isn't.  What can o' worms does this open?  Will he still get the notice that he might be eligible for the EIC, or the Medicaid issue, or something else?

Apologies for the long post, and if you read this far then I appreciate your patience!   Hate, hate, hate these returns.

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50 minutes ago, Lion EA said:

I think the mom includes the son in her "household" for ACA whether or not she claims his dependency. But, I have few marketplace/Medicaid clients, so that's just something stuck in the back of my head of somewhere... 

Mom has coverage through her employer and I have no idea how she/they answered the questions for his coverage. It's one of the items on my list to discuss with her.

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Just had a situation similar.  Parents specifically said they would not be claiming son so Medicaid in California would cover him.  It was one of those situations were they thought they were getting something for nothing but ended up losing out on a big education credit.

I would file the deadbeat son as if he could be claimed by someone else and just don't claim him on the mom's return.  The rule is even if no one does claim him, if he could be claimed he cannot claim self.

 

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If little children are 28 and 30 and NOT disabled, EIC doesn't come to play. 

Yes, medicare might be an issue if parents claim the "child".

As for ACA (if you decide to claim son on parent's), all you have to do is to check the box "all of the them had insurance" and don't worry where the insurance came from.

If son made $1,500, claiming himself or NOT claiming himself will NOT change his refund (you mentioned he would get a bigger refund if he claims himself).

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5 hours ago, Pacun said:

If son made $1,500, claiming himself or NOT claiming himself will NOT change his refund (you mentioned he would get a bigger refund if he claims himself).

Not true.  If he claims himself then his std deduction is $12,000.  If he is a dependent of another, standard deduction is earnings + $350 and he has a small amount of tax that reduces his refund. 

 

5 hours ago, Pacun said:

If little children are 28 and 30 and NOT disabled, EIC doesn't come to play. 

For the other son that I didn't ask about, I think this older son meets all the tests to claim the EIC.  I only do a couple of EIC returns and always look up the rules so I don't fall into a trap of missing a piece of documentation.  Older of the two sons:

  • Single,
  • a citizen,
  • has a SSN,
  • no children,
  • no disability,
  • lived in U.S. all year
  • no investment income
  • Age eliminates this taxpayer from being anyone's qualifying child, and income too high to be anyone's qualifying relative.
  • His brother is younger but can't be his qualifying child because over age 19 and not a student, not disabled (lazy) and can't be a qualifying relative because support test is not met.
  • Earnings and AGI are ~ $10,000

What disqualifies the older of the two sons from claiming the EIC?  What am I missing?

 

 

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Sorry, you are right, but all the time I thought he was a dependent. If parents don't want to claim him, he cannot claim himself and therefore the IEC is not in play.

You are right, if he can claim himself (he provided more than 50% of his own support), then he will get EIC.

The older will qualify for EIC even if parents supported him 99%. He is not a dependent at all.

My previous answer concentrated on the second little child. Sorry.

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