Updated: Jan 4, 2021
Claiming a dependent on your tax return could possibly save you thousands yet many are confused about what and who qualifies as a dependent. In this article, it will be breaking down what is a dependent, the rules to claim a dependent, and possible credit opportunities for you to claim.
What is a Dependent?
A dependent defined by the IRS is a qualifying person other than the taxpayer or spouse who entitles the taxpayer to claim a dependency exemption.
Who Qualifies as a Dependent?
· A Qualifying Child
· A Qualifying Relative
Tests to Claim a Dependent
· The dependent must be a U.S. citizen, U.S. resident alien, U.S. national, or a resident of Canada or Mexico
· The person cannot be treated as a dependent if he or she files a joint return with a spouse.
· The taxpayer, or spouse of the taxpayer, cannot be an eligible dependent on someone else's tax return.
Qualifying Child Tests
· The child must be your son, daughter, stepchild, foster child, brother-sister, half-brother, half-sister, stepbrother, stepsister, or any descendant of any of them.
· The child must be under 19 at the end of the year, or, if a full-time student by the end of the year, age 24. If the child is permanently and totally disabled, then there is no age limit.
· The child must live with you for more than half a year.
· The child cannot provide more than half of his or her own support.
· The child cannot file a joint return for the year.
Qualifying Relative Tests
· The relative cannot be a qualifying child for you or any other taxpayer.
· The relative must live with you for the entirety of the year or be on the list under Relatives who don’t have to live with you listed in Publication 501.
· The relative must have a gross income under $4,200 for the entire year.
· The taxpayer must provide more than half of the support towards the relative.
Satisfying the rules listed above allows you to lessen your tax liability thus lowering your taxable income. Some credits that you may be eligible for are when claiming a dependent(s) is the earned income tax credit and child tax credit.