In a NutshellYou may know that claiming dependents on your federal income tax return can help lower your tax bill. But who can you claim as a dependent?
This article was fact-checked by our editors and Christina Taylor, MBA, senior manager of tax operations for Credit Karma.
When other people live with you, it can significantly affect your day-to-day cost of living
Even if someone doesn’t live with you — for example, a college student — the financial support you give them can still impact your financial well-being. It can also affect your federal income tax if you’re able to claim that person as a dependent on your federal income tax return.
However, the IRS has strict criteria on who qualifies as a dependent and who doesn’t. Many taxpayers find it worth navigating the rules on claiming dependents to realize some tax savings.
Here’s what you need to know about who you can claim as a dependent — and who you can’t claim.
- Who qualifies as a dependent?
- Can your child qualify as a dependent?
- Who else can be your dependent?
- What are some dependent-related tax breaks?
Who qualifies as a dependent?
If you provide financial support to people who live with you, you probably have dependents — and it’s important to find out if you do.
“Unfortunately, many taxpayers miss out on money-saving opportunities because of confusion over who the IRS considers to be a dependent ,” says Evelyn Cook, CPA and president of Cook CPA Group in Roseville, California.
Figuring out if the folks in your life are considered dependents doesn’t have to be complicated.
“First, your dependent must meet the initial criteria, which applies to anyone who you claim as a dependent,” says John Kane, a certified public accountant with Cook Martin Poulson P.C. in Salt Lake City, Utah.
For any person to be your dependent, they must …
- Be a U.S. citizen, U.S. national, U.S. resident alien or resident of Canada or Mexico.
- Not be claimed as a dependent by anyone else.
- Not file a tax return as married filing jointly, unless the return is filed solely to claim a tax refund of income tax withheld or estimated tax payments made.
- Not claim anyone else as a dependent.
- Receive more than half their support from you
Once these basic criteria are met, separate tests apply for children versus other adults who live in your household.
Can your child qualify as a dependent?
Your child can qualify as a dependent if all the following is true:
- By blood, adoption or marriage, the child you are claiming is your child, stepchild, foster child, sibling, step-sibling, half-sibling or a descendent of any of these relatives.
- The child you are claiming lives with you for more than half the year, unless an exception applies. Exceptions include divorce or separation, kidnapping, and children who were born or died during the year.
- The child must be younger than 19 at the end of the tax year, or younger than 24 at the end of the tax year and going to school full-time during some part of at least five months of the year. If the child is permanently disabled at any time during the year, this rule doesn’t apply.
- The child didn’t provide more than half their own support.
- The child isn’t filing a joint tax return unless it’s only to claim a refund for taxes of income tax withheld or estimated payments they made to the IRS.
If two taxpayers – such as divorced individuals – want to claim a qualifying child as a dependent in the same tax year, only one can do so. The one who gets to claim the child is:
- The parent, or
- If both taxpayers are the child’s parents, the one with whom the child lived for the most time during the tax year, or
- If the child lived with both parents an equal amount of time during the year, the parent with the highest AGI can claim the child as a dependent; or
- If neither is the child’s parent, the taxpayer with the highest AGI can claim the child.
However, it is possible a child could be claimed as a qualifying child by two taxpayers if one of them is not required to file an income tax return, and either doesn’t file one or files only to get a refund for income tax withheld or estimated tax they paid.
Who else can be your dependent?
The rules for other dependents are different.
“Unlike a qualifying child, a qualifying relative can be any age. There is no age test for a qualifying relative,” says Brian J. Thompson, CPA and attorney, BrianThompsonLaw.com, of Oak Park, Illinois.
Qualifying “relatives,” also don’t have to be actual blood relatives, despite the fact that the IRS uses that term. Housemates can count if they meet the basic criteria listed above, including receiving more than half their support from you, along with the following:
- Living with you all year long in a relationship that doesn’t violate any local laws or related to you in one of the ways the IRS lists
- Making less than $4,050
- Not being claimed by anyone else on a tax return
If they pass the test, any person — from your college roommate crashing on your couch to your daughter’s boyfriend living in your guest room — could be a dependent.
What’s more, relatives — both blood relatives and in-laws — who don’t live with you may still qualify as dependents if they meet all the other criteria. For example, imagine you provided more than half the financial support to your widower father-in-law, and his income is less than the threshold. You could claim him as a dependent on your taxes, even if he doesn’t live with you.
Still not sure if you have dependents?
“The easiest way to determine if someone is a dependent is to go to the Interactive Tax Assistant Tool provided by the IRS,” says Dr. Sandra Byrd, a CPA and professor of accounting at Missouri State University.
What are some dependent-related tax breaks?
Why go through all the trouble to figure out who can count as a dependent? Because claiming dependents may help you reduce your tax obligation. Dependents could make you eligible for tax credits.
“It’s possible for a taxpayer to receive tax credits for a dependent, including the Earned Income Tax Credit, Child and Dependent Care Tax Credit, American Opportunity Tax Credit, Health Coverage Tax Credit and Lifetime Learning Credit,” Byrd says.
“For 2018, everything changed,” Kane says. “Tax reform eliminated personal exemptions and did four things to compensate for the change”:
- Increasing the standard deduction: For 2019, the standard deductions are $12,200 for single filers and $24,400 for joint filers. For heads of household, the standard deduction is $18,350.
- Increasing the child tax credit: If you are eligible to claim the credit, you could receive a credit of up to $2,000 per qualifying child, which is twice the amount you could claim under the old rules. The credit is refundable up to $1,400.
- Allowing people with higher incomes to take the child tax credit: The income eligibility limit for married couples filing jointly is now $400,000.
- Creating a nonrefundable $500 tax credit: This applies for dependents who don’t qualify for the child tax credit.
Dependents still matter if you want to claim that child tax credit, which is only available for qualifying children who are dependents, and if you want that $500 refundable credit. However, you will no longer be able to claim a $4,050 personal exemption for yourself and every eligible dependent on your return. This change is in effect until Dec. 31, 2025.
Make sure you keep your list of dependents updated so that you can claim the new expanded tax credits that are available to you only if you have dependents. Each deduction can help reduce your tax obligation.
Relevant sources: IRS: Dependents | IRS Publication 501, Dependents, Standard Deduction and Filing Information | IRS: A “Qualifying Child” | IRS Publication 4012, VITA/TCE Volunteer Resource Guide | IRS: How Exemptions and Dependents Can Reduce Taxable Income | IRS Form 6251 Alternative Minimum Tax – Individuals | IRS SOI Tax Stats – Individual Statistical Tables by Size of Adjusted Gross Income | Tax Cuts and Jobs Act of 2017
Christina Taylor is senior manager of tax operations for Credit Karma. She has more than a dozen years of experience in tax, accounting and business operations. Christina founded her own accounting consultancy and managed it for more than six years. She co-developed an online DIY tax-preparation product, serving as chief operating officer for seven years. She is the current treasurer of the National Association of Computerized Tax Processors and holds a bachelor’s in business administration/accounting from Baker College and an MBA from Meredith College. You can find her on LinkedIn.