Introduction

You may have been informed that the IRS is cracking down on people who claim dependents. They’re not doing anything new; they’ve been doing this for years.

It’s still important to know exactly what’s allowed and what isn’t when claiming someone as your dependent on your tax return. Here’s everything you need to know about dependents:

What is a dependent?

A dependent is a person who meets the IRS definition of a qualifying child or qualifying relative.

A child can be your child, adopted child, stepchild, foster child, or grandchild. The person must live with you for over half the year and be under age 19 at the end of the year (or under 24 if they are a student), or any age if permanently and disabled.

A related dependent can be your parent, stepparent, or sibling. You may also claim an adult son or daughter is incapable of self-support due to mental or physical illness; see exceptions below for more details on this requirement.

Why claim someone as a dependent?

You may want to do so for a variety of reasons. Claim someone as your dependent:

They are a relative or the child of a relative.

You paid for more than half of their living expenses, so they qualify as a “qualifying relative.” You can usually deduct their unreimbursed medical and dental expenses in this case.

They often live with you, but they’re not your child. If they don’t qualify as your qualifying child because they don’t live with you for over half the year (and aren’t related), they may still be able to be claimed as your dependent if they meet all other requirements.

They are a U.S citizen or a resident alien who has not filed jointly with someone else and has a gross income of less than $4,400 (for 2022).

What qualifies someone as a dependent?

A dependent is a person you support and who meets the following criteria:

A citizen, resident, or national of the United States (or a resident of Canada or Mexico) for tax purposes and has lived with you for more than half the year.

It is also your child whom you can claim as your dependent on your return. A foster child must be placed in your home by an authorized placement agency or court order but does not have to live with you for the entire year to qualify as your qualifying child.

If you are divorced or separated, see Publication 501, Exemptions, Standard Deduction and Filing Information; IRS Form 1040 Instructions & Requirements; IRS Publication 17 Child Tax Credit.

Qualifying child

To qualify as a child, the following requirements must be met:

The child must be under 19 or 24 and a full-time student.

The child must’ve lived with you for at least half of the tax year (for example, in your home for at least six months of the year).

The child can’t provide more than half of their support. Support includes food, clothing, medical care, housing, and education.

If all three conditions are met, you may claim your son as a dependent on your tax return.

Qualifying relative

A non-qualifying child’s dependent but who meets the other tests to be your dependent.

A qualifying relative can be a child, parent, grandparent, or another relative who lives with you all year as a household member.

To be considered a qualifying child or relative for the dependency exemption deduction and other tax benefits related to being claimed as a dependent on someone else’s return, your relationship must include more than just being related by blood or marriage.

There are different legal tests for whether someone can be claimed as a qualifying child or dependent. To meet these tests for this purpose:

• The individual must reside with you for more than half of the year. (that means he was not only in your home—he also did not maintain his own home).
• He must receive over half his support from you during 2022 (his income doesn’t count).

Examples of Claiming Dependents

To consider someone as a dependent, you must meet the following criteria:

You can claim them as your child.

They are disabled and cannot support themselves financially. They are a full-time student for at least one academic year.

If you were still thinking about claiming your cousin or niece because they are not related by blood, think again! For example, the IRS includes “other relatives” in its definition of dependents.

Other relatives could include grandparents or family members who live with you for more than six months of the year but don’t have to be related by blood or marriage (for example, stepparents).

Deductions and credits available when claiming dependents

Certain deductions are allowable by the IRS. If you have dependents.

These include:

Deductions for education expenses. If your child was in college or technical school during the year, you could deduct tuition and fees for that or any other education expenses paid on their behalf.

Medical expenses. You can deduct certain medical costs you pay on behalf of your dependents, including long-term care insurance premiums paid within a year before filing taxes that cover anyone who is. At the end of the year, you must be 65 years old or older. The tax year needs support because they are physically helpless due to illness (including recovery).

Child care credit. If you employ someone else to watch your children while working, this could be claimed as a credit against income tax owed at the end of each year; there is no requirement that this expense is deducted from income first (though some, such as daycare centers, will require a proof).

The maximum amount is $2K per qualifying child under age 13 but drops by 20 cents per dollar after 8 children are included in one household.

Questions and answers about claiming dependents.

In 2022, how much can a dependent child earn?

If you claim a child as a dependent, they must be under the age of. If they are a full-time student, they must be 19 or 24 years old. They must be

24 years if they are not a full-time student.

When is your child required to file a tax return?

If your child has income, they must file a tax return. For example, suppose you support your children and receive more than half of their financial support from you during the year, and they have no other income sources (i.e., salary or investment income). In that case, they must file a tax return even if they do not owe any taxes.

However, there are exceptions for young children who are under 18 or 24 years old as well as those that meet other criteria:

If your child is younger than the age of 18 at the end of the year and is not married (or does not live with their spouse at any time during the year), then they do not have to file a federal income tax return unless they owe self-employment taxes on net earnings from self-employment on Schedule SE (Form 1040). If this situation applies to you, contact us today.

If your child is below 24 years at the end of the year and meets specific tests regarding unearned income, earned income credit eligibility may apply; however, these requirements can be complicated. 

When should I stop claiming my child as a dependent?

When it comes time to stop claiming a child as a dependent, the IRS has specific requirements that must be met.

In general, you will have to stop claiming your dependent when:

• They turn 19 years old.
• They get married (unless they are considered disabled).
• They are no longer full-time students for any part of 5 calendar months during the year (for example, if they attend college for three months and then take a semester off). If your child works less than full-time while attending school and meets other requirements, they may still be eligible to be claimed as a dependent on your taxes in some cases.

Can you claim adults as dependents on your taxes?

You may be able to claim an adult child as a dependent if they are under 24 and a full-time student.

You can also claim an adult child as a dependent if they are disabled. This might be because of a physical or mental condition that prevents them from working and paying for their care, such as through a nursing home or assisted living facility.

If the person does not have to pay for their care, you must provide more than half of their support for the year to qualify as your qualifying relative (i.e., child).

If you were providing $3,000 towards their living expenses while they lived at home with you during the year before any medical bills started piling up (and without any other outside support), then your son would still likely qualify as your qualifying relative even though he has chosen not yet been diagnosed with his disease until after he graduates college next year since he was still receiving support from within his household throughout this period.

 What about when it comes to a time in life when people no longer need our financial help? Will those same benefits still apply?

What is the definition of “support”? This returns us to our original scenario: “What happens when someone is declared legally independent?”

In short – nothing much changes! You’ll still get tax breaks like everyone else without having those extra burdens hanging overhead.

IRS says that you can claim a close family member if they meet specific criteria

You can claim a close family member if they meet specific criteria. For example, to be eligible for the dependency exemption, a person must:

• Be your son or daughter (natural or legally adopted) under age 19 or 24 if enrolled full-time for at least five months of the year
• Be your qualifying child who is incapacitated and requires someone to provide him with basic necessities;
• Be your sibling, half-sibling, stepbrother/stepsister, nephew/niece, granddaughter/grandson, father-in-law/mother-in-law, and mother/father-in-law.

Conclusion

If you are eligible to claim a dependent on your taxes, it can save you a lot of money. It’s essential to know how much they can earn and when they need to file their return before claiming them as a dependent.

For example, if you want to claim your child as a dependent but they earn more than $6,000 annually, then they will not qualify for this benefit.