According to Internal Revenue code, a taxpayer may claim a qualifying child or relative as a dependent. However, claiming an exemption for a dependent requires that the dependent meet the joint-return test, citizen or resident test and dependent-taxpayer test, which includes a support qualifier that eliminates using a child as a deduction if she provides more than half her own support during the tax year. Income limits apply to those who qualify as dependent relatives.
Qualifying Child or Relative
The IRS allows one exemption, worth $3,650 for 2010, for each qualifying child or relative. A taxpayer may not claim a married child if the child files a joint return with his spouse and there is a tax liability for either party. To qualify as a dependent, the child or relative must also adhere to citizenship requirements and must pass all tests determining qualifying-child or qualifying-relative status. In addition, those who file a tax return cannot claim any deductions if the filer or the spouse, if filing a joint return, is claimed as a dependent by another taxpayer.
Five Tests for Qualifying Child
IRS code lists five tests for qualified-child status. While there is no actual dollar figure associated with claiming a child as a dependent, the filing taxpayer must have provided more than half the child’s support. The proposed dependent child must live with the taxpayer for more than half the year. The child in question must not file a joint return for himself and his spouse for any other reason than to claim a refund. The dependent child must be under age 19 at the end of the year, or if a full-time student, under age 24 and the dependent’s age must also be less than both the filing taxpayers’ ages unless the child is classified as totally and permanently disabled, when no age limit is imposed. A son, daughter, stepchild, brother or sister, half brother or half sister, stepbrother or stepsister or a descendant of any of them qualify as a dependent if other tests are met.
Four Tests for Qualifying Relative
To get the deduction for a qualifying relative, the relative must pass four tests. The prospective dependent relative must have a gross income of less than $3,650 to qualify as a dependent relative. In addition, the taxpayer filing the return must have provided more than half the proposed dependent relative’s total support for the tax-filing year. Furthermore, the person who does not live with the taxpayer and is being considered as a dependent, must be the taxpayer’s child, stepchild, foster child or descendant of any of them; the taxpayer’s sister, brother, half brother or half sister, stepbrother or stepsister; father, mother, grandparent or any other direct ancestor, but not a foster parent; stepfather or stepmother; the son or daughter of the taxpayer’s brother or sister; the sister or brother of the taxpayer’s mother or father; or the taxpayer’s son-in-law, daughter-n-law, father-in-law, mother-in-law, brother-in-law or sister-in-law. All others who qualify as a dependent relative must live with the taxpayer for the entire year as a member of the household. Finally, a dependent child claimed by the taxpayer who files the income tax return or by another filing taxpayer, cannot qualify as a dependent relative.
Taxpayers may not claim a person as a dependent unless the person is a U.S. citizen, U.S. resident alien, U.S. national or a resident of Mexico or Canada. If the taxpayer can claim an exemption for a dependent and fails to make the claim, the dependent still cannot claim an exemption for himself on his tax return. Taxpayers cannot claim exemptions for maids, servants or housekeepers who work for the person filing the income tax return. Taxpayers with dependents may qualify for a child tax credit for each child under 17 years old at the end of the tax year. Consult instructions for the specific form to determine eligibility. Relationships established by marriage are not terminated by death or divorce. If questions about the accuracy of a return persist after completing the form, consult a tax professional before submitting the completed tax return to the IRS.
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