If someone could claim me as a dependent, but they will not, am I required to check the "Someone can claim me..." box on my 1040?

Question

Let's say that an adult is living with his parents. He meets all of the tests for being a dependent of his parents. Now let's say that he wants to file a tax return and claim the Recovery Rebate Credit, as he did not receive any of the stimulus payments in 2020. His parents decide not to claim him as a dependent on their taxes. Can he leave the "Someone can claim me as a dependent" box on his tax return unchecked and claim the Recovery Rebate Credit?

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This does not apply to me, but it could apply to many people this year, with the new Recovery Rebate Credit putting people in the situation where it could be advantageous to not be claimed as a dependent.

Surprisingly, the Form 1040 Instructions do not provide any guidance on checking this box in any way, that I can find. I have seen it asserted many times in answers and comments here on Money.SE that because the form says, "Someone CAN claim...," the box must be checked whether or not anyone actually will claim them. But I have not yet found this explicitly stated in any official IRS website or publication. The ideal answer here will cite an official source.

Answer 1

An interesting question. I was in fact able to find an official IRS document saying that the box must be checked. However, it is not among the normal "user-facing" IRS publications oriented towards taxpayers. Rather it is this document which is apparently part of the training materials for Volunteer Income Tax Assistance (VITA), an IRS program providing volunteer help to people doing their taxes. On page 5-1 (page 67 in the PDF), the document says (emphasis added):

To claim a personal exemption, the taxpayer must be able to answer “no” to the intake question, “Can anyone claim you or your spouse as a dependent?” This applies even if another taxpayer does not actually claim the taxpayer as a dependent. In this case, the taxpayer must check the box on Form 1040 that indicates that they can be claimed as a dependent.

Now, this is talking about exemptions, but it is clear that the document is current because it's marked 2020 and also because it says:

The deduction for personal exemptions is suspended (reduced to $0) for tax years 2018 through 2025 by the Tax Cuts and Jobs Act. Although the exemption amount is zero, the ability to claim an exemption may make taxpayers eligible for other tax benefits.

To me the crucial thing is that the first quote above does not just say "the taxpayer cannot claim the exemption" but actually says "the taxpayer must check the box". So even though this in a section on exemptions, which were effectively eliminated in 2017, it's pretty clear that this is actually saying you cannot leave the box blank, and thus cannot claim any of the "other tax benefits" to which that might entitle you (such as the Recovery Rebate Credit).

It's strange that this isn't said so explicitly in the normal IRS publications that are oriented towards taxpayers rather than tax-assistance volunteers, but I think this document can be considered authoritative, as it's effectively the IRS telling volunteers what to tell taxpayers when helping them fill out their tax forms. As described here, IRS itself vouches for the program as "a reliable and trusted source for preparing tax returns" and the document linked is an actual IRS publication.

Answer 2

I think, legally speaking, it is clear that the person is not eligible for the Recovery Rebate Credit. 26 USC 6428(d) (as well as the corresponding section from 26 USC 6428A for the second round recently added) says:

For purposes of this section, the term "eligible individual" means any individual other than-

[...]

(2) any individual with respect to whom a deduction under section 151 is allowable to another taxpayer for a taxable year beginning in the calendar year in which the individual's taxable year begins, and

Note that it says "allowable". 26 USC 151(c) "allows" exemption deductions (which has been zeroed for 2018 through 2025) for dependents:

(a) Allowance of deductions

In the case of an individual, the exemptions provided by this section shall be allowed as deductions in computing taxable income.

[...]

(c) Additional exemption for dependents

An exemption of the exemption amount for each individual who is a dependent (as defined in section 152) of the taxpayer for the taxable year.

And 26 USC 152 defines "dependent" as someone who meets certain conditions as a qualifying child or qualifying relative, without regards to whether they are actually claimed as a dependent by someone (i.e. regardless of whether someone took the section 151 exemption deduction for them) or not.

So in your example, the person meets the tests to be a dependent of his parents, so he is a "dependent" of his parent as defined in 26 USC 152. 26 USC 151 "allows" his parents to take an exemption deduction (which is currently 0) for him. Regardless of whether the parents choose to actually take an exemption deduction for him (by claiming him as their dependent), this still does not change the fact that they are allowed to take the deduction. Since the deduction is "allowable" to the parents for him, the person is not an "eligible individual" for the Recovery Rebate Credit.

In order for this person to claim the Recovery Rebate Credit on his 2020 form 1040 line 30, he would have to fill out the Recovery Rebate Credit Worksheet in the instructions for line 30. The first question in the worksheet is "Can you be claimed as a dependent on another person's 2020 return?" with answers Yes and No. In order for him to claim the credit, he would have to answer No. I don't think he can honestly answer No if he meets the conditions to be claimed as a dependent, even if nobody actually claims him.

Answer 3

The reason § 151 (relating to exemptions) comes into play when determining whether to check the box "Someone can claim: You as a dependent" is because Internal Revenue Code § 63(c)(5) says: "In the case of an individual with respect to whom a deduction under § 151 is allowable to another taxpayer for a taxable year beginning in the calendar year in which the individual’s taxable year begins, the basic standard deduction applicable to such individual for such individual’s taxable year shall not exceed...."

§ 151(c) allows individual taxpayers an exemption "for each individual who is a dependent (as defined in section 152) of the taxpayer for the taxable year."

§ 152 says "For purposes of this subtitle, the term “dependent” means— (1)a qualifying child, or (2)a qualifying relative."

(c)(1)In general The term “qualifying child” means, with respect to any taxpayer for any taxable year, an individual— (A)who bears a relationship to the taxpayer described in paragraph (2), (B)who has the same principal place of abode as the taxpayer for more than one-half of such taxable year, (C)who meets the age requirements of paragraph (3), (D)who has not provided over one-half of such individual’s own support for the calendar year in which the taxable year of the taxpayer begins, and (E)who has not filed a joint return (other than only for a claim of refund) with the individual’s spouse under section 6013 for the taxable year beginning in the calendar year in which the taxable year of the taxpayer begins. (2)Relationship For purposes of paragraph (1)(A), an individual bears a relationship to the taxpayer described in this paragraph if such individual is— (A)a child of the taxpayer or a descendant of such a child, or (B)a brother, sister, stepbrother, or stepsister of the taxpayer or a descendant of any such relative. (3)Age requirements (A)In general For purposes of paragraph (1)(C), an individual meets the requirements of this paragraph if such individual is younger than the taxpayer claiming such individual as a qualifying child and— (i)has not attained the age of 19 as of the close of the calendar year in which the taxable year of the taxpayer begins, or (ii)is a student who has not attained the age of 24 as of the close of such calendar year.

As such, I agree that this box must be check if someone can claim you as a dependent in that tax year, even if they don't claim you.