Podcast: When Can I Claim a Dependent on My Return

When can I claim a dependent on my return? Can I claim my child or grandchild as a dependent? Can I claim someone who is not related to me? These are some of the questions we get asked a lot during this time of the year. This episode of the Tax Insights Podcast breaks down what you need to know about claiming a dependent on your return.

When Can I Claim a Dependent on my Return?

One of the questions we get asked a lot during this time of the year is can I claim my child, grandchild, parent, or grandparent as a dependent on my return. Can I even claim someone that I am not related to? It’s funny, back in 1987 when the IRS started to require SSNs to be reported for dependents, over 7 million American children disappeared.
 

When Can a Person Claim a Dependent on Their Return?

• There Are Two Ways That You Can Claim a Dependent on Your Return

  •  Qualifying Dependent
    • Must be under age 19 or under age 24 if a student at a college or tech school
    • They live with you for over half the year and be related to you.
    • Are permanently and totally disabled.
    • And you must have provided them with more than half of their financial support
  • Qualifying Relative
    • Is not a qualifying dependent and no one else can claim them as a dependent
    • If related to you – then you can claim them even if they do not live with you
    • If not related – then they have to live with you for the entire year
    • The qualifying relative must have had a gross income of less than $4,300
    • And you must have provided them with more than half of their financial support

Claiming Them as a Dependent Is a Pretty Big Deal Isn’t It?

• Credits You Receive
  • Child tax credit (currently $2,000 if under 17 and $500 if over)
  • Education credits
  • Earned income tax credit
  • Dependent care credit for daycare
  • These credits can amount to thousands of dollars

What About Those Who Were Born During the Year or Died During the Year?

As long as they qualify during the time they were alive, you can claim them as a deduction for the entire year. Those December 31st births are considered to be dependents for the whole year.

There are a lot of divorced parents who have joint custody. Who gets to claim those children?

• Technically, it is the one who has them for more than 50% of the year no matter what the divorce decree says.
• This is true even if the other parent provides more than 50% of the support
• The number of days rules over the support test
• Now if a parent claimed a child that they were not supposed to, then the other parent could go to court to get it resolved. The IRS also has a special form that the parents can sign off on to allow the non 50% parent to claim the child.

What happens with a college student is not living with the parent/guardian?

If they are under 24, you can still claim them even if they live at school. Those are considered to be temporary absences.
 

What about the year they graduate from college?

• If they are under 24 and a student for any part of 5 months, you may be able to claim them.
• The trick here is that if they are working, you still need to meet the 50% support test.

Next week we will talk about times that you may not want to claim them and when the dependent needs to file a tax return.

Jeff Dvorachek

As a partner, I have thorough experience providing tax services to individuals, privately held businesses, nonprofit entities and estates and trusts. I also provide compilation and review services.