Who Qualifies as a Dependent for Tax Purposes?

Many taxpayers mistakenly pass up on a valuable tax exemption you can take for dependents.

Many taxpayers mistakenly pass up valuable tax exemptions, not realizing that they qualify for them. For example, you may be entitled to additional dependency exemptions if you support your elderly parents, other relatives, or even people not related to you who live in your household. If you provide more than half the support for anyone and you haven’t claimed the person as a dependent in the past, make sure you read and understand these rules.

How Much Is the Exemption?

Each dependency exemption you claim is worth a $4,050 deduction (2017 and 2016). However, the 2017 exemption is subject to a phase-out that begins with adjusted gross incomes of $261,500 ($313,800 for married couples filing jointly). It phases out completely at $384,000 ($436,300 for married couples filing jointly).

Children You Support Who Live with You

You may claim one dependent exemption for each child who is what the IRS calls a “qualifying child.” A qualifying child is:

  • related to you—your son, daughter, stepchild, adopted child, foster child, brother, sister, stepbrother, stepsister, or a descendant of any of them (for example, your grandchild, niece, or nephew).
  • under age 19 (or a student under 24)—the child must be under age 19 at the end of the tax year, or under age 24 if a full-time student for at least five months of the year, or any age if permanently and totally disabled at any time during the year.
  • not self-supporting—did not pay for over half of his or her own support during the year.
  • lives with you—either for more than half of the year or falls within special rules for children of parents who are divorced, separated, or living apart (temporary absences for things like schooling, medical treatment, vacations, business, or military service don’t count.)
  • U.S. citizen or resident—a U.S. citizen, U.S. national, or resident of the United States, Canada, or Mexico for some part of the year.

Most qualifying children are the biological, adopted, or stepchildren of the taxpayers who claim them as dependents, but this doesn’t have to be the case. For example, a brother, sister, or grandchild can be your qualifying child if he or she is under 19, lives with you over half the year, provides less than half of his or her own support, and is a U.S. citizen or resident. Moreover, a qualifying child can be as old as 23 if he or she is enrolled in school full-time.

To obtain an exemption for a dependent child, you must list the child’s Social Security number on your tax return. No number, no exemption. This rule is intended to prevent people from claiming exemptions for children who don’t really exist. You may obtain a Social Security number for your child by filling out and filing Social Security Form SS-5. See the Social Security Administration website at www.ssa.gov for details. It takes about two weeks to get a Social Security number. If you do not have a required SSN by the filing due date, you can file IRS Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return. If you or your spouse is expecting a child, apply for a Social Security number at the hospital when you apply for your baby’s birth certificate. The state agency that issues birth certificates will share your child’s information with the Social Security Administration and it will mail the Social Security card to you.

Relatives You Support

Most dependents are taxpayers' children. But they don't always have to be. If you contribute toward the support of a parent or other relative (or even a nonrelative in some cases), you could be entitled to claim a dependent exemption for that person. Even if you haven’t taken a dependency exemption for the person in the past, in some cases paying just a few dollars more to support the person during the year could entitle you to a valuable exemption.

To be your qualifying relative, a person must pass three tests:

Member of household or relationship test

First of all, the person must either be related to you or live with you as a member of your household. “Related” means the person is either:

  • your child, stepchild, eligible foster child, or a descendant of any of them (for example, your grandchild) (a legally adopted child is considered your child)
  • your brother, sister, half brother, half sister, stepbrother, or stepsister
  • your father, mother, grandparent, or other direct ancestor, but not foster parent
  • your stepfather or stepmother
  • a son or daughter of your brother or sister
  • a brother or sister of your father or mother, or
  • your son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law.

If any of these relationships were established by marriage, they don’t count if the marriage was later ended by death or divorce.

Gross income test

The person’s taxable income must be very low—no more than the dependent exemption.

Support test

You must pay for over half the person’s support during the year (unless there is a multiple support agreement).

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How It Works

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