Must a Child Live With You to Claim Him or Her on Your Taxes?

You may be eligible for a tax credit for money spent on items such as day care and tuition.

You may be eligible for a tax credit for money spent on items such as day care and tuition.

One perk of parenthood comes in the form of tax benefits, including the child tax credit, dependent withholding exemptions, the dependent care tax credit and the ability to claim head of household as your filing status. To claim your child on your tax return and take advantage of these benefits, you must first verify that he meets the eligibility criteria specified by the IRS. A child is deemed qualified for the tax credit after satisfying four tests: relationship, age, support and residence. The residency requirement takes into account special living situations in which the child may not reside year-round with the parent.

Residence

One test that must be satisfied to prove you are eligible to claim your child on your taxes is the residence test. Although exceptions do exist in cases of the birth or death of the dependent or children who have been kidnapped, this rule generally requires that the dependent reside with the taxpayer for more than half of the tax year. This type of living arrangement is common in cases of divorced parents with shared custody or parents of students away at college. In cases where two parents try to claim the child on separate tax returns, preference would be given to the parent who has housed the dependent for the largest amount of time during that year or with the higher income.

Relationship

Before a child can be claimed on an individual’s tax return, she must also satisfy the relationship test. This means that the dependent must be the individual’s child, sibling, niece, nephew or grandchild. According to IRS guidelines, foster children and stepchildren are also considered to be an individual’s children for the purpose of this evaluation.

Age

There are also restrictions on whether the dependent is a qualified child based on his age. Typically children who are 19 or younger can be claimed by a parent or guardian. Full-time college students who are enrolled in school for at least five months of the year and are under 24 may also be eligible. Dependents who are permanently disabled are exempt from these age restrictions and may be considered a qualified dependent for tax purposes at any age.

Support

In addition to the other criteria, you must provide at least half the dependent’s financial support for the tax year in which you intend to claim her as a qualified child. This means you may still be eligible to claim your working teenager on your taxes as long as she contributes less than half of her support, even if she earns more than that and saves or otherwise spends the remainder of her earnings. Items such as rent or mortgage payments, tuition, clothing and food are considered when calculating the total amount of financial support each party has paid for.

 

About the Author

Based in Virginia, Amanda Banach has been a writer since 2009. Her professional work experience includes roles in media advertising, financial services and human resources. She holds a Bachelor of Arts in human resources management and is PHR-certified.

Photo Credits

  • Photos.com/Photos.com/Getty Images