Tax Question of the Week: Who Can I Claim as a Dependent?
posted Mar 24, 2016 by Joe Tamburo, CPA in the Global Tax Blog
One of the most widely confusing areas among taxpayers is deciding who qualifies as a dependent on your return. There are a number of eligibility qualifications that someone you wish to claim as a dependent must meet, including age and relation to you.
What qualifies someone as a ‘dependent’?
For someone to qualify as a dependent on your return, he/she needs to be:
- Your child, or
- Your elderly parent/ relative, or
- Your disabled child/ relative, or
- Significant other whom you are supporting.
Some rules for qualifying dependents
- Must be a U.S. citizen
- Must have a TIN (Tax Identification Number)
- Cannot have filed a joint return for the year
- Cannot provide more than half of his or own support for the year
- Cannot take a personal exemption if you claim him/her on your return
Some rules for claiming children:
- The child must have lived with you for a minimum of half of the year of the return
- The child must be related to you (can be blood related, or a stepchild, foster child, brother, sister, stepbrother, stepsister, etc.)
- The child must be 18 or younger by the end of the year, or 24 or younger if a student (attended school full-time for five months of the year, at least). Note that there are no age requirements for a permanently disabled child.
- Unless disabled, the child must be younger than you or your spouse if married filing jointly.
Some rules for claiming parents:
- If you pay more than half of your parent’s expenses, he/she is considered your dependent.
- Your dependent parent does not have to live with you.
- If both you and your siblings support your parent, determining who can claim the individual as dependent rests on who provides the 50% support. If no one individually supports your parent to meet the 50% support test, but together, you and your siblings’ support reaches the 50% mark, you can take turns each year on claiming the parent as dependent. Each sibling has to contribute a minimum of 10% of your parent’s finances to be able to take a turn on claiming the parent on his/her return.
You have the potential to save thousands of dollars on your taxes by claiming dependents, but make sure your relationship with the individuals you consider dependents meets the standards set forth by the IRS. There are other chances for you to benefit from supporting your dependents, through the child tax credit (Read our blog: “Save Money this Summer with the Child and Dependent Care Credit”) and the earned income credit—Do your research to ensure that you are saving all you can on taxes this year.
Questions? Contact any member of our Tax Services Team.