In case it wasn't difficult enough to raise a child or care for an aging family member, you have to navigate a maze of exceptions in the US tax code to figure out if you can claim someone as a dependent. Terms like "qualifying child" and "qualifying relative" are enough to make anyone's head spin.
There are some general factors listed in the tax code to consider when determining if you can claim someone on your income taxes. The person may be a qualifying child if they meet all six of the following criteria:
• Citizenship - The person must be a citizen, national, or resident of the US, Canada or Mexico.
• Relationship - The person is a child, brother, sister or is their descendent (grandchild, niece, nephew, etc.).
• Age - The person must be under age 19 at the end of the year, under age 24 at the end of the year and a full-time student, or any age and "totally and permanently disabled".
• Principal Place of Abode - The person must live with you for more than half the year. There are special exemptions that apply for separated and divorced parents.
• Support - You must have provided more than 50% of their support for the year.
• The person cannot file a Joint Return with someone else, with few exceptions
Do you support someone that doesn't meet all of these criteria? That person may be your qualifying relative instead if they meet all five of these criteria:
• Citizenship – same as for qualifying child
• Relationship - The qualifying child rules are expanded to include parents, grandparents, uncles, aunts, in-laws and members of your household for the entire year.
• Income - The person's gross income (before deductions) must be less than $3,650 in 2010.
• Support – same as for qualifying child
• Not a Qualifying Child of you or anyone else
Most importantly, a person can only be a dependent on one person's tax return. If you and your ex-spouse both claim your child, you could get a letter from the IRS or your electronically filed return will be rejected. Same goes if your married child or college-age child claims himself.
Everyone's situation is different. Get help from a CPA when you have questions.
--- Donna Boyette, CPA, Senior Accountant