Who Is A Dependent?

You may have thought this was a simple question. Of course, you say, my kids are my dependents. You are probably right, but it happens to be more complex than that. The correct answer may depend upon how old your kids are and how much money they make. You may even have dependents who are not your kids.

QUALIFYING CHILD

In one of the tax acts a couple of years ago , the test for a dependent was split into two categories: "qualifying child" and "qualifying relative". In order for a person to be a "qualifying child", they must pass all 4 of the following tests: 1) relationship (to the taxpayer) - a) son, daughter, grandchild; b)  brother, sister or child of the brother or sister. This also insludes adopted or foster children. 2) age - they must be younger than the taxpayer. 3) principal place of abode - they must have lived with you for at least half the year. 4) support - the child must not have provided more than half of their own support.

QUALIFYING RELATIVE

If the child fails the qualifying child test, they may still be a dependent if they pass all 4 tests to be a qualifying relative. 1) relationship - this is the same as the one above, but also includes: father, mother or grandmother; neice, nephew; aunt, uncle; all in-laws; any other individual that was amember of the taxpayer's household;
2) gross income - the individual cannot have earned more than $3,650; 3) support - the taxpayer must have furnished over one-half of the individual's support for the year; 4) dependency - the individual must not be a qualifying child of the taxpayer or any other taxpayer.

Clear as mud? Just follow the tests above for the child first. Then if you fail that test move to the relative test. Please note: in order to take a dependency exemption for any person on your tax return, that person must have a social security number.