By Thomas Van Blunk
When you are filing your federal tax return you have the option to claim someone as a dependent. Claiming someone as a dependent can open doors to tax deductions on both the federal and state levels. However, there are a lot of rules when it comes to claiming someone as a dependent. We will cover some common rules for claiming a dependent at the federal level. For more information about claiming a dependent on the state level, please visit your local state tax website.
At the federal level, the IRS recognizes that the following requirements generally apply to all dependents:
- A dependent must be a U.S. citizen, resident alien or national, or a resident of Canada or Mexico.
- A person can’t be claimed as a dependent on more than one tax return, with rare exceptions.
- A dependent can’t claim a dependent on their own tax return.
- You can’t claim your spouse as a dependent if you file jointly.
- A dependent must be a qualifying child or qualifying relative.
There are several rules for classifying a qualifying child or qualifying relative.
The full requirements for a qualifying child are outlined on the IRS website, but a child must pass these tests to qualify as a dependent:
- Must be a son, daughter, stepchild, eligible foster child, sibling, half-sibling, stepsibling, adopted child, or a child of anyone previously mentioned.
- Must be under 19 years of age or under 24 years of age if a full-time student.
- There is no age requirement if the child is permanently and totally disabled.
- They must live with you for more than half the year unless exceptional circumstances apply.
- They must get more than half of their financial support from you.
- The child’s return must not be filed as married filed jointly unless to claim a tax refund.
For a qualifying relative to qualify as a dependent, they must meet the general rules for dependents and pass the following tests:
- Cannot be a qualified child.
- Must live in the household all year round or must be a certain relative.
- Their gross income must be under $4,700.
- More than half of their financial support must come from you.
Please go to the IRS website for more information regarding these rules.
There are various credits and deductions that you may be able to qualify for when claiming dependents according to the IRS:
- Child Tax Credit
- Adoption expenses
- Additional Child Tax Credit
- Credit for Other Dependents
- Earned Income Tax Credit (EITC)
- Child and Dependent Care Credit
- Education credits
- Medical expense deductions
- Other itemized deductions
Note that these credits and deductions have their own rules and qualifications. Please check the IRS website for the requirements of the above credits and deductions. Don’t forget to check your state’s website for any state credits or deductions you may be eligible to receive.
This information has been prepared for informational purposes only, and is not intended to provide, and should not be relied upon for tax, legal, or accounting advice. If you have any questions regarding claiming a dependent, please do not hesitate to contact us at Lear & Pannepacker.