It is not always easy to figure out who you can claim as a dependent on the Internal Revenue Service. Below is a cheat sheet that will help you easily figure out who you can claim when it is time to file your tax return.
Claiming a dependent on your tax return could save you thousands of dollars. For each qualified dependent, you could reduce your taxable income by $3,900. These savings add up quickly and can be very substantial.
Many other benefits are also only available for qualified dependents including tax credits. For example, the earned income tax credit and child tax credit only apply to qualified dependents. These rules will also help you determine if you are able to write off medical expenses, dependent daycare, other deductions and most of the tax credits that involve family issues or children. Qualifying for all of these benefits can mean the difference between having a large tax bill and getting a refund.
There are 2 types of qualifying dependents. Both are subject to completely different rules.
1. A Qualifying Child
2. A Qualifying Relative
The first thing you need to do is answer the below questions to determine if you will be able to claim them.
Are they a resident or citizen? They must be a United States resident, United States citizen or United States national, Mexican resident or Canadian resident.
Are you the only taxpayer that is claiming the person as a dependent? Only one person can claim the dependent on their tax return.
Is the person you are claiming filing a joint return with another taxpayer? You cannot claim a dependent if they are filing a joint return with another taxpayer.
When it comes to a qualifying child, you must also be able to answer “yes” to the below questions.
Is the child related to you? The child must be your daughter, son, foster child, sister, brother, half-sister, half-brother, stepsister, stepbrother, adopted child or offspring of one of the previously listed.
Does the child meet the age limit? The child needs to be under 19 years old or 24 years old if they are a full-time student. If the child is totally and permanently disabled, there is no dependent age limit.
Does the child live with you? The child needs to live with you for more than 50% of the year, although there are several exceptions.
Do you support the child financially? You must provide more than 50% of their support during the year.
Are you the only taxpayer claiming the child? Two taxpayers cannot claim the same child as a dependent. In situations where the parents are divorced, you can use IRS’s Publication 501, “tie-breaker rules”.
Review the below checklist to determine if you can claim your relative as a dependent.
Does the relative live with you? The relative must live with you or be on the IRS’s Publication 501 “Relatives who do not live with you”.
Does the relative make less than $3,900 in income? The relative cannot have more than $3,900 in gross income.
Do you support your relative financially? In order to claim your relative as a dependent, you must provide more than 50% of their financial support during the year.
Are you the only taxpayer claiming the relative? Only one taxpayer can claim the relative on their tax return.