The Rules for Claiming Dependents on a Tax Return

Here’s what you need to know about claiming dependents on a tax return.

Claiming dependents on a tax return makes all the difference when it comes to your taxes. Yet, many of us are not aware of who in our family may qualify as our dependent. Adding a dependent on your tax return increases the exemption amount you can claim, which in turn reduces your taxable income and your tax liability. In short, if you can claim dependents, you should. But before you file your taxes, review the rules for claiming dependents below.

Why claim someone as a dependent?

If you have a family, you need to know how to IRS defines “dependents” for income tax purposes because it could save you thousands of dollars on your taxes. For every qualified dependent you claim, you reduce your 2016 taxable income by $4,050. This can add up to substantial savings on your tax bill!

Who qualifies as a dependent?

The IRS rules for qualifying dependents cover just about every conceivable situation. But generally, there are two types of dependents:

  • A qualifying child
  • A qualifying relative

For both types of dependents, he or she must meet all four of the following criteria:

  • Citizen or resident: The person must be a U.S. citizen, national, or resident.
  • You are the only person claiming them as a dependent: You can’t claim someone who takes a personal exemption for himself or claims another dependent on his or her own tax form.
  • He or she is not filing a joint tax return: You can’t claim someone who is married and files a joint tax return.

For a qualifying child, he or she must meet all of the following:

  • Relationship: A qualifying child can be a natural child, adopted child, stepchild, foster, sibling, stepsibling, or a descendant.
  • Residency: A qualifying child has to have the same residence as the taxpayer for more than half the year.
  • Age: A qualifying child has to be either under the age of 19 or under the age of 24 and a full-time student for at least five months of the year. For someone who is permanently disabled, there is no age limit.
  • Support: The individual who is being claimed as a dependent must not have provided more than half of his or her own support.

For a qualifying relative, the following criteria apply:

  • Relationship: A qualifying relative can be a child or descendant of a child, a sibling, an uncle, aunt, relative-in-law, etc.
  • Gross-income: The dependent’s income cannot be above $4,050 in order to file as a dependent.
  • Support: You must provide more than half of your relative’s total support each year.

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