Your income doesn’t just feed you and your significant other. That money goes toward taking care of anyone else who is depending on you for support. Most often these are your own children who aren’t old enough to work and support themselves. However, those aren’t the only dependents you can have. In some instances, you can claim your sibling’s children on your tax return.
If your niece or nephew relied on you for more than half of his or her support, you can claim that child as a dependent on your taxes.
Niece and Nephew Tax Dependent
There are a variety of reasons for claiming a child on taxes who is not yours. If you have legal custody of a child, whether it’s your own offspring or someone else’s, that child is considered yours when it comes time to file your taxes. However, if you’re taking care of a relative’s child for most of the year, even if you aren’t the biological parent, you may be able to claim him as a dependent on your taxes.
If a relative relies on you for more than half of his support, then that person can be claimed as a tax dependent when you file. That includes nieces and nephews, also known as “niblings.”
Although you won’t have to provide documentation when claiming a child on taxes who is not yours, you need to be prepared to prove it if you’re questioned about it after filing. This will happen in the form of a CP75 or CP75A Notice Request for Supporting Documentation. You’ll receive this notice in the mail in the months or years following filing, and it serves to notify you that your return is being audited.
If you get a CP75 or CP75A notice, though, don’t panic. Receiving this form doesn’t mean an auditor is going to show up at your house. These by-mail requests are the most common types of audits, and the vast majority of the time, simply sending in the information requested will resolve everything. Form 886-H-DEP lists the supporting documents you’ll need, including a birth certificate or court document showing your relationship to the child.
Exceptions to Claiming Nieces and Nephews
As with other dependents, claiming a child on taxes who is not yours isn't an option if someone else is claiming him as a dependent. That means you’ll need to coordinate with your sister or brother to make it clear that you’ll be claiming the deduction. If you're claiming a child on taxes who is not yours, that child also cannot have earned more than $4,150 in 2018.
2018 Taxes and Deductions
Tax reform has reduced some of the benefits of having a tax dependent. In previous years, you could claim a personal exemption on each dependent, but that disappears starting with the 2018 tax year. The standard deduction has been increased to $12,000 per person to at least partly make up for it, but having a tax dependent won’t benefit you there. If you supported niblings in 2018 but didn’t in 2017, the fact that the standard deduction is nearly doubling won’t offset the tremendous increase in expense you have.
However, there are still several benefits to claiming a child on taxes that is not yours. Your qualifying niblings will qualify you for a child tax credit, which doubles in 2018 to $2,000 per qualifying child. Since up to $1,400 of that $2,000 is refundable, if you don’t owe money when you file, you could get a check for up to $1,400. If your niece or nephew is in day care, you’ll also want to look into the Child and Dependent Care Credit, which lets you claim up to $3,000 of child care and similar expenses for children up to age 12. You can only claim the expense if the care is to allow you to work and is not for Friday night babysitting services.
2017 Taxes and the Personal Exemption
If you're still filing your 2017 taxes, you can claim child tax credits as well as the personal exemption. In 2017, the personal exemption provided $4,050 for each dependent in your care.
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- Can You Claim a Sibling Older Than You with a Disability on a Tax Return?
- When Do I Have to Stop Claiming My Child on Federal Income Tax?
- Can a Person Claim Another Person on a Tax Return if They Are Not Married?