Cameron Miranda
Claiming dependents is a great way to reduce your taxable income, but there are certain requirements and restrictions that you should be aware of. A dependent is a person who relies on another taxpayer for financial support. Under new tax laws, a dependent can be a qualifying child or a qualifying relative. To qualify as a dependent, a child must be under the age of 19 or under 24 if they are a full-time student, or any age if they are permanently and totally disabled. They must also live with you for more than half of the year and get more than half of their financial support from you. It's important to note that a dependent cannot claim another person as their dependent and must be a US citizen, resident alien, or a resident of Canada or Mexico.
| Characteristics | Values |
|---|---|
| Relationship | Son, daughter, stepchild, eligible foster child, brother, sister, half-brother, half-sister, stepbrother, stepsister, adopted child, or offspring of any of them. Also includes in-laws and direct ancestors such as parents and grandparents. |
| Age | Under 19 or under 24 if a full-time student. No age limit if permanently and totally disabled. |
| Residency | Must live with the taxpayer for more than half the year, with exceptions for temporary absences. |
| Support | Must not provide more than half of their own financial support. The taxpayer must provide over half of their support. |
| Joint return | Should not file a joint return unless it is to claim a refund of taxes paid or withheld. |
| Citizenship | Must be a U.S. citizen, U.S. national, U.S. resident alien, or resident of Canada or Mexico. |
| Gross Income | Gross income subject to tax must be less than $4,700 for the 2023 tax year and $5,050 for 2024. |
| Additional criteria | The dependent cannot claim another person as a dependent. The taxpayer must meet the gross income test and be able to claim the dependent for Earned Income Tax Credit (EITC) purposes. |
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What You'll Learn
Qualifying child
A qualifying child is a dependent who meets the following criteria:
Firstly, the child must be related to you. They can be your son, daughter, stepchild, eligible foster child, brother, sister, half-brother, half-sister, stepbrother, stepsister, or an offspring of any of them. A legally adopted child is considered your child.
Secondly, the child must meet the age requirement. They must be under the age of 19 or, if a full-time student, under the age of 24. There is no age limit if the child is permanently and totally disabled.
Thirdly, the child must live with you for more than half of the year. However, several exceptions apply to this rule. For instance, if the child was born or died during the year for which you claim the Earned Income Tax Credit (EITC) and they lived with you for more than half of their life during that year, this counts as having lived with you for more than half the year. Temporary absences from the home are also counted as time lived with you.
Fourthly, the child must not provide more than half of their own annual support.
Additionally, the child must be a U.S. citizen, U.S. national, U.S. resident, or a resident of Canada or Mexico.
Finally, the child must not file a joint tax return with a spouse, except in certain cases. For instance, the child can file a joint tax return if they are claiming a refund of withheld taxes.
If all the above requirements are met, you can claim the child as a dependent.
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Qualifying relative
A qualifying relative is a dependent you can claim when filing your taxes. To be considered a qualifying relative, the person must meet certain criteria set out by the IRS.
Firstly, the qualifying relative must not be a qualifying child of the taxpayer or anyone else. A qualifying child must be under the age of 19, or under 24 if they are a full-time student, or any age if they are permanently and totally disabled.
Secondly, the qualifying relative must be a citizen, national, or resident alien of the United States or a resident of Canada or Mexico.
Thirdly, the qualifying relative must be related to the taxpayer. They can be related as a child, sibling, parent, grandparent, niece or nephew, aunt or uncle, certain in-laws, or step-relative. If the individual is not related to the taxpayer, they can become a qualifying relative by living with the taxpayer for the entire year.
Finally, the taxpayer must provide more than half of the total support for the qualifying relative during the tax year. The qualifying relative must not provide more than half of their own financial support.
By claiming a qualifying relative, the taxpayer may be eligible for tax credits and other benefits, such as the Child Tax Credit, earned income tax credit, and child and dependent care credit.
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Gross income
When it comes to dependents, a qualifying child's gross income must be less than a certain amount for the year. For the 2023 tax year, the threshold was $4,700, and for 2024, it increased to $5,050. This threshold will increase again to $5,200 for 2025. It is important to note that certain income is excluded from this requirement, such as Social Security benefits.
Additionally, the child's gross income includes any amounts earned by performing services. This is true even if, under local law, the child's parent has the right to those earnings and may have received them. This means that if a child earns money through a job or other means, that income is considered part of the child's gross income and not the parent's.
To claim a dependent, the taxpayer must provide more than half of the dependent's financial support for the year. This support can include things like housing, food, and other basic needs. It is worth noting that a dependent can have their own tax returns and even be married, but they must not have filed a joint tax return, except to claim a refund.
In summary, gross income plays a crucial role in determining who can be claimed as a dependent under new tax laws. The qualifying child's gross income must meet certain thresholds, and it is essential to consider the income earned by the child through jobs or other means. Additionally, the taxpayer must provide significant financial support for the dependent to be eligible for tax credits or deductions.
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Support
Claiming dependents is one of the most effective ways to reduce your taxable income. A dependent is either a qualifying child or a qualifying relative.
A qualifying child must be related to you as a son, daughter, stepchild, foster child, brother, sister, half-brother, half-sister, stepbrother, stepsister, or a descendant of any of them. They must be under the age of 19 at the end of the year, or under the age of 24 and a full-time student. They must live with you for more than half the year, and you must provide more than half of their financial support.
A qualifying relative must be a member of your household for the entire year. They must be related to you as a father-in-law, mother-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law. You must provide more than half of their financial support, and their gross income must be less than $4,400 to $5,050.
Additionally, you may be able to claim a boyfriend, girlfriend, domestic partner, or friend as a qualifying relative if they meet the above criteria. However, some states do not allow this, so be sure to check your individual state law.
It's important to note that a dependent cannot claim another person as a dependent and must be a U.S. citizen, U.S. national, U.S. resident alien, or a resident of Canada or Mexico. You also cannot claim your spouse as a dependent if you file jointly.
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Residency
To be claimed as a dependent, a person must meet the residency test. This means that the dependent must have lived with the person claiming them as a dependent for more than half of the tax year. This rule applies to both qualifying children and relatives.
There are exceptions to the residency test for children who were born or died during the year, and for temporary absences. For example, if a child lives with each parent separately for different portions of the year, the parent with whom the child lives for the longer period of time during the year should claim the child as a dependent. This parent is the custodial parent. The noncustodial parent may not claim the child unless the custodial parent provides a signed Form 8332.
In the case of a qualifying relative, the person must live with the person claiming them as a dependent for the entire year as a member of their household. This includes relatives such as a son-in-law, daughter-in-law, in-laws, and other relatives who are not qualifying children.
It is important to note that a dependent cannot be claimed on more than one tax return, with rare exceptions. Additionally, a dependent cannot claim another person as a dependent on their own tax return.
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Frequently asked questions
A dependent is either a qualifying child or a qualifying relative. A dependent is a person who relies on another taxpayer for financial support.
A qualifying child must be related to you. They can be your son, daughter, stepchild, eligible foster child, brother, sister, half-brother, half-sister, stepbrother, stepsister, or an offspring of any of them. They must be under the age of 19 or under 24 if they are a full-time student. There is no age limit if they are permanently and totally disabled. They must live with you for more than half of the year, but some exceptions apply. They must not provide more than half of their own financial support for the year.
Qualifying relatives include your father, mother, grandparent, or other direct ancestor; your stepfather or stepmother, 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. You may also be able to claim a boyfriend, girlfriend, domestic partner, or friend as a qualifying relative if they meet certain criteria.
