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When you file your taxes, you can claim certain people on your tax return as dependents. Dependents are defined as people other than a taxpayer and his or her spouse who entitle the taxpayer to claim certain tax breaks.
You used to be able to claim an exemption for a dependent. In 2017, each exemption allowed you to reduce your taxable income by $4,050. Starting in 2018, however, tax reform under the Tax Cuts and Jobs Act eliminated personal exemptions, including for dependents.
Although dependents don’t automatically reduce your taxable income under current tax laws, having dependents can make you eligible for certain tax deductions and credits, so it’s important to understand the rules for who you can claim as a dependent.
On this page:
- Why Claim Someone as a Dependent?
- Who Qualifies as a Dependent?
- Frequently Asked Questions
Why Claim Someone as a Dependent?
Claiming someone as a dependent can help you reduce your tax liability. When you claim someone as a dependent:
- You could be eligible for the Child Tax Credit: This credit is worth up to $2,000, of which a maximum $1,400 is refundable. Credits provide a dollar-for-dollar reduction on your tax bill and refundable credits mean you can get back more money than you paid in.
- You could be eligible for the Credit for Other Dependents: This is a credit valued at up to $500 for dependents who don’t count as qualifying children.
- Your qualifying child could also make you eligible for the Earned Income Tax Credit: The value of the earned income credit depends on your income and the number of children in your family. In 2018, one qualifying child could be worth an EITC of up to $3,461; the number rises to $5,716 for two children and $6,431 for three children.
- Depending on your situation, you might be entitled to other tax credits, including the American Opportunity Tax Credit if you pay tuition for a qualifying dependent.
Who Qualifies as a Dependent?
There are two primary categories of dependents: qualifying children and qualifying relatives. Although each category has its own independent requirements, there are some requirements common to both. For example, the dependent must meet all of the following qualifications:
- The person must be a U.S. citizen, national, or resident alien of the United States.
- The person can’t be claimed by someone else as a dependent, nor can they claim anyone else as a dependent.
- The person being claimed as a dependent can’t file his or her own tax return as married filing jointly unless that joint tax return is only filed to claim a tax refund.
- The person must have received at least half of their financial support from you.
In addition to these common criteria, the person you claim as a dependent has to meet specific requirements to count as either a qualifying child or qualifying relative.
To count as a qualifying child, the person you’re claiming as a dependent:
- Must be your child, foster child, or stepchild; sibling, half-sibling or step-sibling; or a lineal descent of these relatives. The relationship can be established by blood, marriage, or adoption.
- Must be a member of your household for at least half the year unless an exemption applies, such as if your child died during the year, was born late in the year, lived separately due to divorce or separation, or was kidnapped.
- Must be under the age of 19, permanently disabled, or under age 24 and attending school full-time for at least five months at the end of the tax year.
- Must receive at least half of his or her financial support from you.
In cases of divorce or other situations where two people may have the right to claim a child as a dependent, only one can do so.
Parents have first dibs for claiming kids as dependents, but if both parents want to claim the child, the parent with whom the child lived longer during the year can claim the dependent.
If the child splits time equally with parents or if neither person who wants to claim the child is a parent, the person with the highest adjusted gross income gets to claim the child.
To meet the qualifying relative test, the person you’re claiming:
- Doesn’t actually have to be a relative — anyone who meets the other criteria counts
- Must live with you all year unless the person is a close relative, including certain blood relatives or in-laws
- Must not make more than $4,050
- Can’t be claimed as a dependent by anyone else
- Must receive at least half of his or her total support from you
Frequently Asked Questions About IRS Dependent Rules
If you still have questions, that’s not a surprise — the rules are complicated. Here are answers to some of the most common questions people have about qualifying dependents.
- Can someone who isn’t a relative really be considered a dependent? Yes, as long as the person lives with you and you provide at least half of their financial support. This means anyone from a roommate to a second cousin who crashes in your house could possibly count as a dependent.
- Do you need to have a dependent to qualify for the Earned Income Tax Credit? Not technically. You need at least one qualifying child. But the EITC rules don’t require you to meet the support requirements for the child just to get the credit, but you do have to meet the support requirements for the child to be considered your dependent.
- What if your child is away at school? If your child is away at school for part of the year, this is usually considered a temporary absence, so you should still be able to claim the child as a dependent as long as the other criteria are met.
- Is it ever possible to claim your spouse as a dependent? Your spouse is not a dependent under any circumstances.
If you have a child or other person who lives with you for whom you provide substantial financial support, there’s a good chance you can claim that person as a dependent on your tax return and reduce your tax liability.
Saving on taxes is a smart financial move, so make sure you know who your dependents are and whether they meet the IRS criteria.
Author: Christy Rakoczy