What is a Qualifying Relative?

In our previous blog, we reviewed the rules for claiming a child as a dependent under the qualifying child tests.  What if there is a person in your life that doesn’t meet one of the qualifying child tests but you fully support that person?  Can you still claim this person as a dependent on your tax return?  The answer may be yes under the rules for qualifying relative.

Not a Qualifying Child Test

The person can’t be a qualifying child or be a qualifying child for anybody else.  Click here to read more about qualifying child.  

Member of Household or Relationship Test

The person must meet either one of these tests.  The person has either lived with you for the entire year or is related to you in one of the following ways:

– Child/ Stepchild/ Grandchild
– Son/ Daughter-in-law
– Brother/Sister
– Half Brother/Sister
– Step siblings
– Mother/Father
– Grandparents
– And if related by blood: Aunt, Uncle, Niece, or Nephew.

Gross Income Test

The person’s gross income cannot exceed the exemption amount for the year.  The exemption amount for 2017 is $4,050.

Support Test

You must provide more than half of the person’s financial support throughout the year. Financial support may include cash given, expenses paid on behalf of the child (car insurance, food, housing), college costs paid through loans, and fair rental value of the space used at your home.

Other Rules

There are special cases to the rules stated above.

A person born or died in the year, but lived with you for the rest of the time, may be considered of lived with you for the entire year.

A person is temporarily not living with you due to illness, school, business, military service, or vacation; may be considered to have lived with you the entire year.

The person may be financially supported by multiple people.  In this case, one of you may claim the person as a dependant. You must discuss this among the group and you must have provided at least 10% of the person’s support.

You may be able to claim your spouse as a dependent on your Married Filing Separate tax return.  Your spouse must have earned $0 gross income to qualify as a dependent on your tax return.

IRS. “Personal Exemptions and Dependents.” Publication 17 (2016), Your Federal Income Tax. IRS, n.d. Web. 01 June 2017.

Claiming Older Child as a Dependent

Congratulations! You have a child graduating from high school.  Even more exciting is he or she is enrolled in college, planning their own life, and finding their own path.  Your child may have a job for extra money.  You are happy to see your child growing up to be an adult.  Then you start to think.  What about taxes next year? Can you still claim your child as a dependent? Does it matter how much he or she makes working part time while going to school? When do you have to stop claiming your child as a dependant on your taxes?

There are two set of rules for claiming a dependent on your tax return.  The first set of rules is called, “Qualifying Child.”  The second set of rules is called, “Qualifying Relative.”  In this blog, we will review the rules for qualifying child.  Stay tuned for our next blog article on the rules for qualifying relative.

Relationship Test

The child must be your son, daughter, stepchild, foster child, brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant of any of them.

Age Test 

Any child under the age of 19 at the end of the year meets the age test.  If the child is between the ages of 19 and 24, then the child must be a full time student to meet this test.  There are no age restrictions for children that are permanently and totally disabled.

Residency Test

Your child has to have lived with you for more than half a year. There are exceptions for temporary absences such as; if the child is away for school, a child who was born or died during the year and if the parents are separated and the child lives with the other parent.

Financial Support Test

You must provide more than half of the child’s financial support throughout the entire year. Financial support may include cash given, expenses paid on behalf of the child (car insurance, food, and housing), college costs paid through loans, and fair rental value of the space used at your home.

Evaluating this test is based on the amount of income earned by your child.  If your child earned $5,000 throughout the year working at a part time job, then you will need to provide $5,001 of financial support to meet this test.

Return Test

Generally, you can’t claim a married child as a dependent if the married child filed a joint return with his or her spouse.

If your child files his or her own tax return, the child must not claim themselves as a dependent on the tax return.

Other Rule

The child has to be a U.S. citizen, U.S. resident alien, a resident of Canada or Mexico, or a U.S. national. There are exceptions for adopted children.

If your child doesn’t meet any one of these rules, then you still may be able to claim the dependency deduction under qualifying relative rules.

IRS. “Personal Exemptions and Dependants.Publication 17 (2016), Your Federal Income Tax. IRS, n.d. Web. 01 June 2017.

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