When determining if you may claim a potential-dependent, the general rule of thumb states that between food, lodging, clothing, and other necessities, you must have provided at least half of their total support for the tax year. Additionally, the dependents can have their own tax return, but they may not file a joint tax return for the year – unless it’s strictly to claim a refund. They must be either a U.S. citizen, a U.S. national, or a resident alien. Finally, they will need a taxpayer identification number which is usually a Social Security Number, but can also be an Individual Taxpayer Identification Number (ITIN) or an Adoption Taxpayer Identification Number (ATIN).
The most typical dependent falls under the category of your own child. The child must live with you for at least half of the year and be related to you as either your own child, stepchild, foster child, or a descendant of any of those. Age requirements state 18 or younger throughout the tax year, or under 24 if they are a full-time student for at least 5 months of the year. The 5 months however don’t have to be consecutive.
Parents and Other Qualifying Relatives
Parents are another category of dependents and this group has some different requirements than children. Your parents can live in a nursing home or other housing, but if you are responsible for at least half of their household expenses throughout the year, even if they don’t live with you – you can claim them as a dependent. In the case of various family members sharing in this responsibility, anyone who provides more than 10% of the yearly total support can complete a Form 2120. This Multiple Support Declaration is available through the IRS and is required to be eligible for a tax break. When multiple taxpayers are claiming a parent as a dependent, you will need a Form 2120 for each of those claimants. The 2120s will all be submitted together by the individual who is claiming the parent.
There are additional requirements that come from claiming a parent or other qualifying relative. In 2017, the individual cannot have a gross yearly income of over $4,050. You cannot claim the person if someone else is claiming them. Finally, if the person is not related to you, they must have lived with you for the entire year to qualify.
The most surefire way to determine if your potential dependent qualifies will take about 15 minutes of your time. IRS.gov has an online questionnaire that requires some basic information to get started. Be prepared to answer questions such as what is your marital status, your relationship to the dependent, the amount of support you provided during the tax year, as well as your adjusted gross income. Sometimes support for a dependent is shared among taxpayers. If no single person supplied more than half of the potential dependent’s support, you will need the terms of any multiple support agreement and a Form 2120, as described in this writing.
If you have any questions or concerns regarding the implications of claiming dependents on your taxes, we encourage you to reach out to us here.