A tax dependent child or relative may provide significant tax breaks.
Dependents can offer remarkable tax savings. But what does the IRS define as a dependent? One of the most common questions about taxes is: Who qualifies as a dependent?
Sometimes determining whether someone can be named as a dependent can be tricky. The IRS provides guidance, but we break down the basics to help you get started.
Who Qualifies as a Dependent
Generally, the IRS recognizes two types of dependents: a qualifying child and a qualifying relative. Each category comes with different rules, but they all share a few common factors.
Shared Rules for Claiming a Dependent
If your dependents meet all of the following conditions, they may qualify:
- Can only claim a person who will not be claimed by another taxpayer, which includes yourself. If your parent claims you as a dependent, you cannot claim yourself on your own taxes.
- The dependent cannot be married and file a joint tax return.
- You can only claim dependents who are your qualifying child or qualifying relative.
- Your dependent must be a US citizen, resident alien, US national, or resident of Canada or Mexico.
Rules for a Qualifying Child
The IRS requires that your qualifying child meet each of these criteria.
The child must be your direct, step, foster or adopted child, sister or brother (including step- and half-siblings) or a descendant of any of them.
Under a Specific Age
The child must be younger than you and under age 19 at year-end, and younger than age 24 at year-end, or any age if disabled.
Your 26-year-old daughter serving in the Peace Corps who relies on you for financial support would not be a Qualifying Child but may meet the definition for a Qualifying Relative.
Lives with You Most of the Time
The dependent child must reside with you for a half year or more.
The IRS grants exceptions for special cases, such as if the child was in the hospital, at college, or incarcerated. Other exceptions are children of divorced or separated parents (or parents who live apart), kidnapped children, and children born or died during the year.
Separated or divorced parents who share custody of a child may agree to take turns claiming the child, but the child may only be claimed by one person per year.
Child Can't Provide Own Financial Support
The child cannot pay for than half of his or her own support for the year.
Although some children work, you can claim them as a dependent as long as they spend no more than half of their income on food, clothing, rent, utilities, transportation, etc.
The parent or guardian still provides the most substantial financial support.
Child Cannot File a Joint Return
The dependent child cannot file a joint return for the year.
The only exception is if they file a joint return only to claim a refund of withheld income tax or estimated tax paid. If you financially support a young dependent who is married and filing a joint return, you may not claim them as a dependent.
Rules for a Qualifying Relative
If someone else lives in your household that might qualify as a dependent, check the qualification tests:
Cannot be Qualifying Child
If you claim a qualifying child or the offspring of a qualifying child, no other taxpayer may claim them as a dependent.
If the dependent is already classified as a Qualifying Child or the qualifying child of another taxpayer, you cannot claim them as a Qualifying Relative.
If your 16-year-old child is married and files his own return, he is a taxpayer, and thus you may not claim your grandchild, even if you provide substantial support.
Must be Related to You OR Live with You
You must be related to the person, or they must live with you all year as a member of your household (assuming your relationship must not violate local law).
For example, you can claim your mother living in a nursing home or your boyfriend, who lived with you all year. It's possible to have a child that does not meet the definition for a Qualifying Child, but meets the conditions for Qualifying Relative.
Income Less Than Threshold
The relative or household member must have less than $4,200 income for the year.
Even if your relative collects interest or receives Social Security, their income for the year cannot be a penny over $4,200.
You Must Financially Support Them
You must furnish at least half of their financial support for the year.
Support includes basic needs like rent, food, transportation, etc. If someone else also helps provide support, each party might sign a Multiple Support Document designating who is permitted to claim.
Tax Benefits If You Have 1 or More Qualifying Dependents
Supporting a household with dependents can offer some valuable tax benefits. To find out if you qualify, take a few minutes to use the IRS Interactive Tax Assistant. It will walk you through some questions and help you determine which credits and deductions you can use.
For more detail about these credits, read our Child Tax Credit article.
Earned Income Tax Credit
EITC can provide $538-$6,660 depending on how many kids you have, how much you earn, and your tax status. There is an income limit before the credit phases out.
Child Tax Credit
Non-dependent children may credit you $2,000 per child or $500 for non-child dependent.
Credit for Other Dependents
Up to $500 credit per other qualifying dependents.
Child and Dependent Care Credit
Generally, this credit supplies 20% to 35% of up to $3,000 for supervised care for a child under 13, a disabled parent or spouse, or another dependent so you can work or look for work.
Head of Household status
If you are single with dependents, you may qualify for a larger deduction if you file as Head of Household. If you need more help understanding Qualifying Dependents, contact the IRS Hotline, a local CPA, or Enrolled Agent.