Dependents are usually your children, but they can be parents, siblings, or other relatives so long as they meet the requirements. A dog though, is never considered to be a dependent.
Photo by Janice E. Roberg
If you’re doing your taxes this year, one of the questions you’ll be asked is, “Do you have any dependents?” What exactly is a dependent anyway?
Most often, but not always, a dependent is your kid. Sometimes, a dependent can be a parent, a sibling, and even in some cases a friend that lives with you. There are many requirements that you’ve got to meet for a person to qualify as a dependent. In general though, a dependent is someone that you support.
There are two types of dependents:
- Qualifying child: that’s going to be a child or a disabled relative that will qualify you for the Earned Income Tax Credit (EIC)
- Qualifying relative: a qualifying relative will get you an exemption for your taxes, but won’t qualify you to get EIC
Let’s look at the Qualifying child first. How does the IRS define what a qualifying child is? Remember, the IRS has weird rules, and it’s not the same as how your family decides who’s related or not.
A Qualifying Child must have a valid social security number to qualify for EIC. If your child doesn’t have a social security number, but she gets one later, you can go back for up to three years to amend the returns. In addition to a social security number, for EIC a Qualifying Child must also meet the following tests:
Relationship: Son, daughter, adopted child, stepchild, foster child or a descendent of any of them such as a grandchild, or, a brother, sister, half brother, half sister, step brother, step sister or a descendant of any of them such as a niece or nephew. Please note that an adopted child or foster child must be placed by the courts. You’ve got to have legal documentation to support your claim; you can’t just take in your neighbor’s child and call her a foster child.
Age: At the end of the filing year, your child has to be younger than you (or your spouse if you file a joint return) and younger than 19; or younger than 24 and a full-time student; or permanently and totally disabled.
Residency: The child must live with you (or your spouse if you file a joint return) in the United States for more than half of the year.
Joint Return: The child cannot file a joint return for the tax year unless the child and the child’s spouse did not have a separate filing requirement and filed the joint return only to claim a refund.
For more details on what is a Qualifying child for EIC purposes, check out this link: http://robergtaxsolutions.com/2012/05/eic-and-your-family-tree-what-counts-as-a-qualifying-child/
Now one of the most common questions I hear about EIC is, “My boyfriend lives with me and my child, but he’s not her biological father, can he claim my daughter for EIC?” The answer is “NO” because the child doesn’t meet the relationship test to the boyfriend.
But, the boyfriend might be able to claim the child as a dependent for an exemption—just not claim EIC for her, because she may be a Qualifying Relative to the boyfriend instead of a Qualifying Child.
Rules for claiming a Qualifying Relative:
In order to be a Qualifying Relative the person can’t be a qualifying child.
The second is to pass the member of household or qualifying relative test. Either the person lives with you for the entire 12 months of the year, or is related to you in your immediate blood line: your brothers and sisters, and their direct descendants, and their direct ancestors (but not foster parents.) Also, your in-laws are included here—even if you divorce, as far as the IRS is concerned, your mother-in-law is your mother-in-law forever. (Heaven help us all!) If, however, a person was at any time during the year your spouse, he or she can’t be your qualifying relative. (I know, that looks like a typo—once you marry ‘em, you can’t be related to ‘em.)
With the qualifying relative rule there is a gross income test: a qualifying relative can’t make more than the standard exemption in income, which for 2017 is $4,050. This means taxable income. If your mother’s only income was $6000 a year from Social Security, that’s not taxable so she’d meet the gross income test.
The last requirement is support: you have to provide your qualifying relative with more than 50% of his or her support. So, back to your mom on Social Security, if she makes $6,000 a year, and spent it all on food and rent, then you’d have to pay at least $6,000 more towards her support.
The rules for Qualifying Relative and Qualifying child can get pretty confusing, especially if you’ve got a unique situation. The IRS website has a tool to help you decide if you can claim a dependent or not. As you go through the questions, remember to answer them honestly and you’ll get a reliable answer. Sometimes people change their answers to get the result they want—that’s how you get into IRS trouble. Answer honestly and claim what you can, don’t claim what you can’t and you won’t have any problems.