Can I Claim My Granddaughter on My Taxes?
Each exemption that you claim on your income tax return decreases your taxable income for the year. However, in order to claim a grandchild as a dependent, she must meet certain conditions. In addition, each person can only be claimed as a dependent on one income tax return, so if your grandchild's parents claim the child, you cannot. If the grandchild does not meet the requirements to be a qualifying child, she might meet the requirements to be a qualifying relative.
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Age Test
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In order to claim your grandchild as a qualifying child on your income tax return, the grandchild must be younger than 19 at the end of the calendar year. However, this age limit increases to 24 if your grandchild is a full-time student. If your grandchild is permanently disabled, you can claim him no matter his age. The Internal Revenue Service does not impose age limits on who can be claimed as a qualifying relative.
Residency
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To be a qualifying child, your grandchild must live with you for at least half of the year. Exceptions to this rule include time away for illness or education. For example, if your grandchild only lives with you for three months during the summer and spends the remaining time away at boarding school, you would still be allowed to claim the child. Since the grandchild meets the relationship requirement to be a qualifying child, the grandchild does not have to live with you the entire year under the qualifying relative tests.
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Support
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To be a qualifying child, the grandchild must not provide more than half of his own support. For a qualifying relative, you must provide at least half of the grandchild's support and his income cannot exceed $3,650, as of 2010. Though these sound similar, the difference is important. For example, if a grandchild requires $10,000 of support, if the grandchild provides $3,000, you provide $4,000 and another person provides $3,000, the test for a qualifying child would be met because the grandchild does not pay more than half of his own support, but not the test for a qualifying relative because you do not pay more than half.
Claiming the Exemption
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To claim a qualified child, the child cannot be filing a joint income tax return unless the return is for a refund only. When you claim your grandchild on your income taxes, you must use either form 1040 or 1040A. On line 6, you have to include the grandchild's name, relationship to you (grandchild) and her Social Security number. If you do not include the correct Social Security number, the IRS can reject your deduction.
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References
- Photo Credit tax forms image by Chad McDermott from Fotolia.com
