The IRS knows that some taxpayers provide their kids and relatives with financial support. That’s why the government offers folks with dependents the opportunity to reduce their tax burden. Being able to claim someone as a dependent may significantly lower your tax bill, especially if you qualify for a tax break like the Earned Income Tax Credit or the Child Tax Credit.
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Not sure whether you can claim a child or family member as a dependent? Here’s a breakdown of what the IRS has to say about the matter.
Who’s Considered a Dependent?
In order for you to claim someone as a dependent, you must have provided more than half of the person’s financial support for the year. The child or family member must also be a U.S. citizen, a resident alien, a U.S. national or a resident of Mexico or Canada.
You can claim a child or relative as a dependent as long as no one else can claim that person as a dependent. Generally, you cannot claim someone as a dependent if he or she is married and filing a joint tax return. But there are a couple of exceptions to that rule. You may be able to claim a joint filer as a dependent if he or she only filed jointly in order to get a refund of estimated taxes that were paid or taxes that were withheld.
Related Article: How Many Allowances Should You Claim?
What It Means to Have a Qualifying Child
If you want to claim a child as a dependent, he or she must meet certain requirements. For one thing, the child must be related to you. For example, your son, stepson, nephew, grandchild or foster child can be considered a dependent.
In most cases, the child you’re trying to claim must live with you for more than six months out of the year. But there are exceptions for children who are away from home because they’re sick, attending college, serving in the military, starting a business or taking a vacation.
The child you’re trying to claim has to meet an age test as well. You can only claim a child as a dependent if he’s under the age of 19. However, you can claim a full-time student as a dependent until he turns 24. Children who are permanently or completely disabled can be claimed as dependents for their entire lives if they meet the other criteria for qualifying children.
What It Means to Have a Qualifying Relative
If you have a relative who relies on you for most of their financial assistance – be it a parent or great aunt twice removed – you can claim that person as a dependent as long as no one else claims her. But if your relative is considered a qualifying child (even if no one actually claims her), you cannot claim her as a dependent on your tax return.
In order for you to claim a relative as a dependent, that family member cannot have a gross annual income above $4,150. Gross income includes all earned and unearned income.
The relative who you want to claim as a dependent must also live with you for the entire year. There are exceptions for mothers, fathers, nieces, nephews and other relatives. For a full list of relatives who you can claim even if they don’t live with you, you’ll need to review IRS Publication 501. If someone died during the year, you can claim that relative as a dependent for the whole year as long as he lived with you up until his death.
Related Article: How to File Taxes
Before you file taxes, you’ll need to find your dependents’ Social Security numbers. That way, you can include that information on your tax return. You cannot claim someone as a dependent if you don’t have access to a Social Security number, individual taxpayer identification number (ITIN) or an adoption taxpayer identification number (ATIN) for that person.
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