Ed note: In its simplest form, a dependent is a person who relies on another. In the world of the IRS and taxes, a dependent is a more specific and complicated thing. Leer en español.
You are allowed to claim one exemption for each person you can claim as a dependent. This is important, since exemptions reduce your taxable income. Dependents are qualifying children or qualifying relatives as described below.
Qualifying children must meet these requirements:
- They are your children, stepchildren, foster children, sibling, half sibling (or the descendent of those)
- They must be under the age of 19 and be younger than you (or your spouse), be under age 24, be a student and be younger then you, or be permanently and totally disabled
- The child must have lived with you for more than half the year
- The child must not have provided more than half of his or her support for the year
- The child must not be filing a joint return for the year
So who is a qualifying relative?
- The person cannot by anyone’s qualifying child
- The person must be related to you in one of these listed ways as a relative who does not live with you, or live with you all year as member of your household
- The person’s gross income for the 2014 tax year must be below $3,950 ($4,000 for 2015) and
- You must provide more than half of the support for that person during the year
Dependency can actually be one of the more complex tax issues, and we get a lot of questions about it. Here are a few common concerns with answers from The Tax Institute.
1. Someone has already claimed me as a dependent, do I have to file a tax return?
Even if someone else, such as a parent, claims you on their tax return, you may still be required to file your own return. Filing requirements vary with annual income, marital status, earned income tax credit payments received, and other factors. Find out if you need to file here. If your exemption has been used on your parent’s return (or someone else’s), you cannot also take your exemption.
2. My girlfriend and her children live with me; can I claim them as dependents?
You might be able be able to claim your girlfriend as a dependent if she is not required to file a tax return, and in-fact does not do so (unless merely to receive a refund of withholding).
Even though your girlfriend’s daughter would typically be your girlfriend’s dependent, if your girlfriend does not have a filing requirement and does not file an income tax return (unless merely to receive a refund of withholding), your girlfriend’s daughter may be considered your qualifying child if the other requirements for that status are met.
There is a great table in IRS Publication 501 on page 11 that illustrates the requirements for a qualifying child and relative, such as the relationship test, age test, residency test and the joint return test.
3. How do the dependency rules factor into claiming the earned income tax credit?
In order for many taxpayers to claim the earned income tax credit, they must have at least one “qualifying child.” In this situation the rule is slightly different as you don’t have to meet the support test when determining whether the child qualifies you for the credit like you must in order to claim the dependency exemption. Also, a qualifying child must have lived with you in the United States for more than half the year and have a social security number that is valid for employment in the United States.
It is important to note that there is no general requirement that a qualifying child be the your dependent for earned income credit purposes as these rules are independent of each other.
4. My son was away at school for part of the year; do I still get to use his dependency exemption?
This is probably a temporary absence; your child is considered to have lived with you during periods of time when one or both of you are temporarily absent due to special circumstances such as:
- Vacation or
- Military service
As long as you meet the dependency criteria, temporary absence will not prevent you from using the dependency exemption.
5. Can I claim my spouse as a dependent?
Your spouse is never considered your dependent. On a joint return you can claim one exemption for yourself and one for your spouse. If you file a separate return, you can claim an exemption for your spouse only if your spouse:
- Had no gross income
- Is not filing a return and
- Was not the dependent of another taxpayer
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