Fortunately,
most of us live simpler lives. The basic rules will cover almost everyone.
Here’s how it all breaks down.
There
are two types of dependents, each subject to different rules:
- A
qualifying child
- A
qualifying relative
For
both types of dependents, you’ll need to answer the following questions to
determine if you can claim them.
- Are
they a citizen or resident? The person must be a U.S. citizen, a
U.S. national, a U.S. resident, or a resident of Canada or Mexico. Many
people wonder if they can claim a foreign-exchange student who temporarily
lives with them. The answer is maybe, but only if they meet this
requirement.
- Are
you the only person claiming them as a dependent? You can’t
claim someone who takes a personal exemption for himself or claims another
dependent on his own tax form.
- Are
they filing a joint return? You cannot claim someone who is
married and files a joint tax return. Say you support your married
teenaged son: If he files a joint return with his spouse, you can’t claim
him as a dependent.
Qualifying child
In
addition to the qualifications above, to claim an exemption for your child, you
must be able to answer "yes" to all the following questions.
- Are
they related to you? The child can be your son, daughter, stepchild,
eligible foster child, brother, sister, half-brother, half-sister,
stepbrother, stepsister, adopted child or an offspring of any of them.
- Do
they meet the age requirement? Your child must be under age 19 or,
if a full-time student, under age 24. There is no age limit if your child
is permanently and totally disabled.
- Do
they live with you? Your child must live with you for more than half
the year, but several exceptions apply.
- Do
you financially support them? Your child may have a job, but that
job cannot provide more than half of her support.
- Are
you the only person claiming them? This requirement commonly
applies to children of divorced parents. Here you must use the “tie
breaker rules,” which are found in IRS Publication
501.
These rules establish income, parentage and residency requirements for
claiming a child.
Qualifying relative
Many
people provide support to their aging
parents. But just because you mail your 78-year-old
mother a check every once in a while, doesn’t mean you can claim her as a
dependent. Here is a checklist for determining whether your mom (or other
relative) qualifies.
- Do
they live with you? Your relative must live at your residence all year
or be on the list of “relatives who do not live with you” in Publication
501. About 30 types of relatives are on this list.
- Do
they make less than $4,050 in 2017? Your relative
cannot have a gross income of more than $4,050 in 2017 and be claimed by
you as a dependent.
- Do
you financially support them? You must provide more than half of
your relative’s total support each year.
- Are
you the only person claiming them? This means you can’t claim the same
person twice, once as a qualifying relative and again as a qualifying
child. It also means you can’t claim a relative—say a cousin—if someone
else, such as his parents, also claim him.
Frequently asked questions
- Can
I claim my child as a dependent if she has a part-time job?
Yes, if you provide more than half of the child’s support and meet other criteria. - My
son will be filing a tax return for his summer job. Can he take the
personal exemption if I claim him as a dependent?
No. If you claim an exemption for him on your return, he will not be able to take a personal exemption. - I
support my 67-year-old sister-in-law. Is she qualified to be counted as a
dependent on my tax return?
Yes, because sisters-in-law meet the relationship requirement and there is no age limit for qualifying relatives.
If you would
like to discuss how these changes affect your particular situation, and any
planning moves you should consider in light of them, please give me a call.
Amare Berhie, Senior Accountant
CFO Services http://youtu.be/EYJdQtbPZAI
(651) 300-4777
