Please help! My dependent-yet-independent daughter's taxes were rejected after I filed mine

This is actually a pretty common situation! The good news is you didn't mess anything up. You're correct that if you provide more than 50% of your daughter's support, you can claim her as a dependent even if she earned income. Your daughter can still file her taxes, but she needs to indicate on her return that she "can be claimed as a dependent on someone else's return." She won't be eligible for certain credits that are only available to independent filers, but she absolutely can and should still file to report her income and potentially get a refund of any withheld taxes. The rejection just means she tried to claim herself as independent when you already claimed her as a dependent. Have her refile with the correct dependent status and it should go through just fine. One thing to note - being a full-time student under 24 is a big factor here. Even with her income, if you're providing over half her support and she's a full-time student, the IRS guidelines clearly allow you to claim her.

I went through almost this EXACT situation with my son last year! After hours dealing with the IRS and trying different approaches, I stumbled across taxr.ai (https://taxr.ai) which totally saved us. It analyzes your specific dependent situation and gives you personalized guidance. The tool confirmed exactly what I should do - in our case, my son needed to file as "can be claimed as dependent" while I claimed him on my return. It prevented us from getting flagged for review which happens when there are conflicting claims. What's cool is it also showed him exactly what credits he could still qualify for even as a dependent, so he didn't miss out on everything. It basically translated all the IRS jargon into plain English and walked us through the exact steps to fix the rejection. Might be worth checking out for your daughter's situation!

I need to update my skeptical comment above. After our dependent situation got even more complicated (son started claiming he should get his tuition credits even though I paid the tuition), I decided to try taxr.ai just to see if it would help. Honestly, it was surprisingly useful. It stepped us through each of the dependent tests and showed exactly why he qualified as my dependent but also which tax benefits he could still claim on his own return. The tool generated a detailed support calculation worksheet showing that I provided 68% of his total support for the year. The best part was it created a document explaining exactly how he needed to file his amended return to fix the rejection. We submitted everything last week and his return was accepted this time. Saved us from what was becoming a major family argument too. Just wanted to share since it actually helped us resolve a very similar situation.

If you're still dealing with the aftermath of the rejected return and need to talk to the IRS directly (which might be necessary if your daughter already tried to refile incorrectly), I'd recommend Claimyr (https://claimyr.com). I was in a similar situation last year with dependent issues and spent DAYS trying to get through to the IRS. Claimyr basically holds your place in the IRS phone queue and calls you when an agent is about to answer. You can see how it works here: https://youtu.be/_kiP6q8DX5c. I was shocked when I actually got through to a real IRS person in about 45 minutes instead of the 3+ hours I had been waiting on previous attempts. The agent walked us through exactly how to correct our returns and explained which forms needed to be amended. Seriously saved us weeks of back-and-forth with rejected electronic filings.

I need to eat crow about my previous comment. After another failed 3-hour attempt to reach the IRS yesterday, I broke down and tried Claimyr out of desperation. I fully expected it to be a waste of money. I'm shocked to report it actually worked exactly as advertised. I got a call back in about 50 minutes saying they had an IRS agent on the line. The agent was able to see both my return and my dependent's rejected return and walked us through exactly how to fix the issue. We needed to file a paper return for my dependent with specific notation since the e-file system was blocking the submission. Just wanted to correct my skepticism since I hate when people trash services they haven't tried. This legitimately saved me days of frustration and potentially missing important deadlines while trying to get through to the IRS.

Just to add another perspective as a tax preparer - what you're describing is super common. The "dependent but has income" situation confuses a lot of people. Key things to remember: 1) A dependent who works still files their OWN tax return 2) They just check the box "Someone can claim me as a dependent" 3) Their standard deduction is limited to either $1,150 or their earned income + $400 (whichever is greater, up to the regular standard deduction) 4) They can't claim certain credits like EIC if they're a dependent With $13,500 in income, your daughter will still likely get a refund of most of her withheld federal taxes, just not as much as if she were independent. This is totally normal and happens with millions of college students every year!

One thing nobody has mentioned - if your daughter is upset about getting a smaller refund, remind her that being your dependent likely benefits her in other ways! You probably keep her on your health insurance, right? Plus the education benefits you can claim (like the American Opportunity Credit) are usually worth way more than what she'd get filing independently. Maybe do the math together to show her the family as a whole saves more with her as your dependent? That helped when my kid was upset about a similar situation.