Your child may be living at home while pursuing a Ph. D., or perhaps he returned to the nest after losing a job thanks to economic conditions. Even if you are providing your adult child with full support, you may or may not be able to claim him as a dependent on your federal tax return. You need to ensure your situation falls under the specific guidelines that allow you to claim an adult child as a dependent.
Dependent Tax Deduction
Claiming an additional dependent earns you a tax deduction equivalent to $3,700 in taxable income as of 2012. If you can claim your adult child, it is as if you earned $3,700 less in the tax year and you can take that amount, divided by your basic tax rate, off the amount you owe to the Internal Revenue Service. If you are in the 28 percent tax bracket, you will save $1,036 in taxes by claiming your adult child as a dependent. The savings is tempting, but taking deductions against the rules will cost you more in the long run.
You can claim a child who is older than 19 and for whom you provide support as a dependent if he meets the criteria for "qualifying relatives." Your adult child qualifies under these rules if he did not earn more than $3,800 in the past year and if you provided more than one-half of his total support. It does not matter where your qualifying relative lives; this pertains to students who live in dorms as well as to disabled children who live in group homes or sheltered residences. You can also deduct children of any age under this provision if they have no income and you are paying the rent for their dwellings, if you provide more than one-half of their total financial support.
Children Under 24
If your child is younger than 19, or a full-time student younger than 24, he is a child for tax purposes regardless of his legal status as an adult. The requirements for claiming an adult child who meets this test as a dependent include having the child living at home with you for at least half of the previous tax year, and that he did not provide more than half of his own support during that year. He also must not be filing a joint tax return unless he is claiming a refund.
Definition of Child
A stepchild, sibling, foster child or grandchild can be considered your dependent for tax purposes if he meets these criteria. If you are supporting your child under the pertinent rules, and that child has a child who you are also supporting, you may be able to claim both your child and grandchild as deductions. Contact a CPA or other certified tax professional for specific answers to questions you may have about claiming your offspring or descendants as dependents.
- USA Today: Claiming an Adult Child as a Dependent on Your Taxes
- H&R Block: Your Tax Questions Answered-If my adult child is under age 24 and lives with me, can I claim my child as a dependent?
- H&R Block: Your Tax Questions Answered-Can I claim my adult child over age 24 as a dependent?
- H&R Block: Your Tax Questions Answered-If my adult child and grandchild lived with me for more than 6 months...
John DeMerceau is an American expatriate entrepreneur, marketing analyst and Web developer. He now lives and works in southeast Asia, where he creates websites and branding/marketing reports for international clients. DeMerceau graduated from Columbia University with a Bachelor of Arts in history.