Who Qualifies as a Dependent: A Road-map.

A lot of my clients ask who can they claim as a dependent and this question is not as easy to answer as it seems. The IRS has created a rather complicated test with many exceptions that is difficult to follow. Therefore, if you are trying to qualify someone as a dependent, I urge you to review Publication 501. Although this publication is not a quick read, it provides the most in-depth explanation and many helpful examples regarding who qualifies as a dependent. This post is meant to provide merely a cursory overview of the rules in order to paint a road-map to understanding this concept. 

(A) The following three tests must be met first: 

•  Dependent Taxpayer Test: you (or your spouse, if filing jointly) cannot be claimed as a dependent by another taxpayer. AND 
• Joint Return Test: you cannot claim a married person who files a joint return as a dependent unless that joint return is merely a claim for refund (no tax liability is owed). AND 
• Citizen or Resident Test: you cannot claim a person as a dependent unless that person is a U.S. citizen, U.S. resident alien, U.S. national, or a resident of Canada or Mexico. Note: there are minor exception to these rules that may apply to your specific situation so, again, I urge you to review publication 501. 

(B) If all three of the above tests are met, the person that you intend to claim as a dependent must either be a Qualifying Child or a Qualifying Relative. This means that if your child does not qualify under the Qualifying Child test, he or she may be a Qualifying Relative. 

Qualifying Child: there are five tests that must be met for a child to qualify. 

• Relationship: The child is your son, daughter, stepchild, foster child or a descendant of any of them (such as a grandchild). OR The child is your brother, sister, half brother or sister, stepbrother or stepsister or a decedent (such as your niece or nephew). AND 
• Age: The child must be under age 19 at the end of the year and younger than you (or your spouse if filing jointly). OR A full-time student under age 24 at the end of the year and younger than you (or your spouse if filing jointly). OR Permanently and totally disabled (at any time during the year). AND 
• Residency: the child must have lived with your for more than half the year. There are exceptions to this rule for temporary absences, children who were born or died during the year, children who were kidnapped and children of divorced or separated parents (please review publication 501). AND 
• Support: the child cannot have provided more than half of his or her own support for the year. AND 
• Joint Return: the child cannot file a joint return for the year (unless the child and his or her spouse file a joint return only as a claim for refund). 

Qualifying Relative: there are four tests that must be met for a person to qualify as your dependent. 

• Not a qualifying child Test: the person must not be a Qualifying Child of either you or another taxpayer. AND 
• Member of household OR Relationship Test: the person must either live with you all year as a member of your household OR be related to you in one of the following ways: Your child, stepchild, foster child or a descendant of any of them (such as a grandchild) OR Your brother, sister half brother or sister, stepbrother or stepsister. OR Your father, mother, stepfather or stepmother, grandparent, or other direct ancestor (but not foster parent) OR A son or daughter of your brother or sister (or of your half brother or half sister) OR A brother or sister of your father or mother OR your son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law or sister-in-law (please note that death or divorce does not end relationships that were established by marriage). AND 
• Gross Income Test: a person's gross income for the year must be less than $3,700 (please note that the IRS provides specific rules regarding what qualifies as gross income-see publication 501). AND 
• Support Test: you must provide more than half of a person's total support during the year. If two or more persons provide support but no one person provides more than half of the person's total support, a Multiple Support Declaration many need to be prepared (please review Publication 501 for instructions). 

This content is not intended as legal advice, and cannot be relied upon for any purpose without the services of a qualified professional.