If you support anyone other than yourself and your spouse, the Internal Revenue Service might allow you to claim that person on your federal income tax return. There are many advantages to claiming someone as a dependent, including a reduction in taxable income, lower tax liability, and the ability to claim certain tax deductions and credits. Although most dependents meet the eligibility requirements of a qualifying child, some circumstances might also allow you to claim a qualifying relative as your dependent.
A qualifying child must meet certain eligibility requirements to be considered a dependent, which include relationship, residency, age and support. To qualify as a valid relationship, the child must be your natural, adopted, step- or foster child, a sibling or step-sibling, brother or sister, niece or nephew, a grandchild, or a descendent of any other relative. The residency eligibility test requires that the child live at the same residence as you for more than half of the year.
Some circumstances, such as military leave, illness, school or custody arrangements are exceptions to this rule. The support test requires that you provide more than half of the child's financial needs throughout the tax year. To meet the age requirement, the child must be under 19, 24 and a full-time student, or any age and permanently and totally disabled. If your child meets all of the rules, he qualifies as a dependent and you can claim the dependency on your income taxes.
Some children do not meet the criteria as a qualifying child but might meet the eligibility requirements as a dependent under the qualifying relative tests. The relationship test requires that the child be a relative, descendent of a relative or any other person who lived with you the entire year. The child cannot be the qualifying child of another taxpayer to qualify as your qualifying relative.
To meet the support requirements, the child cannot have gross annual income that exceeds $3,700, as of 2012, and you must provide more than half of the child's support for the year. The child must also be a U.S. citizen, U.S. national, U.S. resident alien, or a resident of Canada or Mexico, and unmarried or married and not filing a joint return with another taxpayer. If the child meets all of these requirements, you can claim him as a dependent.
To claim a child as a dependent, you must provide the IRS with his legal name, date of birth, relationship and Social Security number. In some circumstances, depending on your relationship with the child, the IRS might request a copy of the child's birth certificate to verify a family relationship. If two parents have the right to claim a child, you might also be obligated to provide the IRS with written consent from the other parent to claim the child as a dependent. Refer to Form 8332 for more information.
If a child meets the dependency tests for more than one taxpayer, the custodial taxpayer with whom he lived the most has the right to claim the child. If the child was with each taxpayer equally, the taxpayer with the higher adjusted gross income earns the right to claim him as a dependent. For more information, refer to Publication 501 on the IRS website.
- Jupiterimages/Goodshoot/Getty Images