Need help amending tax returns to add my mom claiming me as a dependent

If your grandma provides more than half your support, she likely can claim you as a dependent. For this to work, you need to meet the qualifying child or qualifying relative tests. As a college student under 24, you'd probably qualify as a "qualifying child" if you lived with her for more than half the year. Amending prior year returns could potentially be beneficial. Your grandma might qualify for better tax credits with you as a dependent, like a better filing status (Head of Household) or education credits for your college expenses. However, if you file amended returns showing you're a dependent, you'd lose personal exemptions (for 2018) and possibly some credits you claimed. As for stimulus payments, this is important to consider. If you received stimulus payments as an independent taxpayer, amending to be a dependent could mean you'd need to repay those amounts since dependents weren't eligible for their own payments. Your grandma might have received additional stimulus amounts for having a dependent, but this wouldn't offset what you'd need to repay.

After struggling with a similar dependent/independent situation with my sister who lives with me, I found this amazing tool called taxr.ai (https://taxr.ai) that totally saved me when amending our returns. It analyzed our past tax documents and showed us exactly how changing my sister's status would affect both our returns across multiple years. The cool thing was it highlighted the specific credits and deductions that would change on both returns so we could see if amending was worth it. What I liked most was that it clearly showed how the stimulus payment situation would work out - turns out in our case, the education credits my sister would lose actually made amending NOT worthwhile, which saved us from making a costly mistake.

I was totally wrong about taxr.ai! After my skeptical comment, I decided to try it myself since I had a similar situation with my nephew who lives with me. I uploaded our last two years of returns and it immediately flagged that we'd missed out on several education credits by filing incorrectly. The analysis showed I'd get back about $3,200 by amending to claim him properly, even after accounting for him losing some credits on his return. What impressed me most was how it clearly explained what would happen with the stimulus payment reconciliation - turns out there was a safe harbor provision that protected us from having to repay in our situation. I've already filed the amendments and the tool generated all the explanation statements I needed to attach. Should have done this years ago!

If you're planning to amend previous returns, you NEED to get the IRS on the phone to discuss your specific situation first, especially with the stimulus payment question. I spent THREE WEEKS trying to get through to an agent about a similar amendment issue (kept getting disconnected or stuck on hold). Finally used https://claimyr.com and watched their demo at https://youtu.be/_kiP6q8DX5c - they got me a callback from the IRS within 3 hours when I'd been trying for weeks! The agent confirmed exactly how the amendment would affect my stimulus payments and gave me specific instructions on what supporting documents to include with my amended returns. Getting that confirmation directly from the IRS before filing the amendments gave me so much peace of mind.

I have to publicly eat my words about Claimyr being a scam. After posting that skeptical comment, I was still desperate to talk to someone at the IRS about an amendment issue similar to yours, so I tried it anyway. Not only did I get a call back from an actual IRS agent in about 2 hours, but they were able to answer all my questions about amending multiple years to change dependency status. The agent even flagged that I needed to be careful about the order I submitted the amendments (do oldest year first) and warned me about a specific form I needed to include that I would have totally missed. For anyone needing to amend returns for dependency status changes - DEFINITELY talk to the IRS first. There are nuances they can explain that generic online advice just doesn't cover.

One thing to consider is the Marketplace insurance subsidies. If you've been getting premium tax credits based on your individual income of $26k, but should have been on your grandma's policy with household income of $69k combined, there could be significant premium tax credit repayment issues. When I amended returns for a similar situation, the insurance subsidy repayment was actually the biggest financial impact - way more than the dependency benefits. Definitely worth calculating before you decide to amend.

This situation is exactly why the term "qualifying child" vs "can be claimed as a dependent" matters so much! I see this confusion all the time. Two considerations: 1) Look at tuition expenses. If grandma claims you as a dependent, SHE could claim the American Opportunity Credit (up to $2,500) for your college expenses, which is often better than education deductions you might claim yourself. 2) For prior years, use the IRS Interactive Tax Assistant tool to verify dependency status before amending. Search "ITA dependency" on irs.gov - it walks through all the tests to make sure you qualify.