Most taxpayers know that they can deduct their dependent children when they file their taxes. However, what they may not know is the rules that come along with claiming dependents on taxes – especially regarding other relatives.
There are guidelines as to when dependents can claim themselves and so much more.
If someone else has the ability to claim you as a dependent you will not be able to take an exemption for yourself and you will have a limited standard deduction. If you were to file with TurboTax, the program will help you understand this in detail.
You can claim someone as your dependent if they are a resident of the United States, are not filing a joint return, and can meet the qualifying child or qualifying relative test. We will go into more detail about this below.
Usually people claim someone as a dependent on their taxes because they have a qualifying child. However, in order to determine whether someone is considered a qualifying child, they have to meet the six criteria’s below:
- Relationship – The child must be your child (i.e. foster, step, adopted, half/step sibling, grandchild, niece, or nephew).
- Age – The dependent should be younger than 19 as well as younger than you. If they are a full time student, attending school at least five months out of the year, they must be under the age of 24. Alternatively, for age not be a factor they must be totally or permanently disabled.
- Residency- The child should have lived with you for at least half of the year.
- Support- The child should not have provided half of their own support during the year.
- Joint Return- The child should not be filing a joint return with their spouse unless it was to claim a refund only.
- Special Test- In the case of divorce, only one parent is going to be able to claim the child. However, if both parents could be eligible the child is going to go to the highest gross income unless Form 8332 has been filled out.
If your potential child has not qualified as a qualifying child, it is possible that they will be a qualifying relative, which would still allow you to claim them on your taxes as a dependent. To be a qualifying relative all of the following criteria’s must be met.
- Not a qualifying child: The dependent is not your qualifying relative if they are already a qualifying child, for you or another taxpayer.
- Relationship: The dependent must reside with you or if they do not live with you, they must be your child, sibling, parent/grandparent, or a direct descendant of any of the above-mentioned relatives.
- Gross Income: The relative’s gross income must be lower than $3,800.
- Support: You must have provided the individual with more than half of their support.
Tax season is right around the corner so it is important to make sure you understand how claiming a dependent on your taxes works as well as when it is appropriate.
Remember, when you file with TurboTax Online, we’ll ask you simple questions about your situation and recommend the filing status, credits and deductions that will get you the biggest refund.