As much as you love receiving that tax return check in the mail, filing your returns can be a very complicated, headache-producing process. This is especially true if you have a unique dependent situation and aren’t quite sure who you can claim. An experienced tax lawyer can help you determine who can be a dependent and the best way to claim them on your taxes. Read on for information regarding who to claim as a child or adult dependent and what to do if you have a unique family situation. Show
Who Qualifies as a Dependent?To claim someone as your dependent, the person must be a US citizen, national, or resident alien and have an SSN, ITIN, or ATIN. In addition to these general principles, there are also age-specific rules dictating who you can claim as your dependent. Claiming Child DependentsIn order to claim someone as a child dependent, the following conditions must be met:
Exceptions to these rules include:
Claiming Adult DependentsThe guidelines for claiming an adult as a dependent are very similar to claiming a child dependent and include:
Adult dependents may include siblings, aunts, uncles, in-laws, parents, your domestic partner, or a friend—as long as they meet these criteria. You May Be Eligible for Tax Credits for Your DependentsUnder the Tax Cuts and Jobs Act (TCJA), you can no longer claim dependent exemptions. Instead, most people can claim a series of tax credits for their children and other dependents. In 2018, these credits ranged from $500 to $2,000, depending on your relationship with the dependent. 3 Tips for Smoother Dealings with the IRSDealing with the IRS can be complicated, especially if you are trying to resolve an issue or concern. Here are three tips for creating smoother dealings with the IRS when working on your dependent claims:
Call SH Block for Help Claiming Dependents on Your Tax ReturnsIf you received a notice from the IRS disallowing one of your dependents, an experienced tax expert might be able to help. At SH Block, our tax professionals will work with you to communicate your erroneous disallowance to the IRS and resolve the issue with minimal hassle. Have a unique family situation? The Tax Court is starting to show some leniency towards non-traditional households and may rule in your favor. Consult with an SH Block tax attorney before filing your taxes to determine the best way to claim someone as a dependent to maximize your returns and tax credits. Contact SH Block by filling out our online form or calling (410) 793-1231 today for your free consultation. The content provided here is for informational purposes only and should not be construed as legal advice on any subject. Claiming a dependent on your tax return can make all the difference when it comes to your tax liability. Adding a tax dependent may qualify you for certain tax benefits such as the child tax credit and child and dependent care credit, which in turn reduces your taxable income and your tax liability. It also allows you the opportunity to file using the more advantageous head of household filing status, if your alternative was to file as a single filer. Before claiming someone as a dependent on your tax return, you have to make sure that the person meets all the Internal Revenue Service (IRS) requirements for a dependent. Key Takeaways
Who Is a Tax Dependent?A dependent is generally defined as someone you take care of financially or otherwise. For tax purposes, not everyone you take care of qualifies as a dependent. The IRS allows two types of tax dependents:
Claiming Children as Tax DependentsThe IRS has come up with a few rules to help you determine whether you have a qualifying child or relative. A dependent who is claimed as a qualifying child has to meet all six of the following tests:
Qualifying Children Tests and Various CreditsThe six tests above are the basic tests for a qualifying child, but, depending on the tax credit you're trying to claim, there are additional tests or modifications to the tests that must be met:
Tie-Breaker Rules for Determining a Qualifying ChildIf there is a situation in which a child qualifies as a qualifying child for two taxpayers, the following tie-breaker rules developed by the IRS should be used to determine which taxpayer claims the tax benefits:
Claiming Relatives as Tax DependentsSome dependents don't fall into the category of a qualifying child but may meet other standards and tests set by the IRS, which enable you to qualify for certain tax credits. In addition to the joint return and citizenship tests, a qualifying relative has to meet the following four rules:
For taxable years beginning in 2022, the standard deduction amount for an individual who may be claimed as a dependent by another taxpayer cannot exceed $1,150, or the sum of $400 and the individual's earned income, whichever is greater. The Bottom LineIf your dependent-care situation is not straightforward, determining whether an individual is a qualifying child or relative can be confusing. If you can't determine whether a person qualifies as your dependent, contact the IRS at 1-800-829-1040 or call a local IRS office. |