Throughout the tax season I will be answering one tax question per day.
Today I will be answering nine questions, all asking pretty much the same question. Can I claim someone as a dependent? There's new rules to follow, so everybody please listen up.
I will answer each of the 9 questions individually, but first I want to let you know that the rules for claiming a dependent have changed. For many, it will be easier for you to claim a dependent. For some, you are going to lose your tax benefits.
Here's the absolute basics.
- The basics will not answer all your questions. For that, you will need to read through the new rules for claiming dependents, and figure out for yourself if you can still claim your dependents.
- The old support test is out. A lot of you have memorized the old rule: provide more than half of a person's total support. Please permanently remove this fact from your memory. It no longer applies.
- There are two new buzz words: qualifying child and qualifying relative.
- The rules for qualifying child and qualifying relative are different.
- If someone can claim a child under the definition of qualifying child, then no one else can claim that same child under the definition of qualifying relative.
- For qualifying relatives, you need to pay attention to the relationship between yourself and the dependent. Some relationship have mandatory residency requirements. Other relationships do not.
- If you need help determining if you can claim a child, please have every person who could possibly claim a child sit down and discuss the issue rationally -- before anyone files their taxes. Anything less than this will result in unnecessary IRS audits. Please don't subject your family members to this additional stress.
Now, on to the specific questions:
- S. Overman asks, "Would it be better to claim a dependent throughout the year instead of waiting to claim on your tax return? I realize that my tax refund would not be as much if I would claim throughout the year but I would like to know how much difference I could expect both ways."
This is related to withholding on your paycheck. You should claim a level of withholding allowances appropriate to your tax situation. A general rule of thumb, claim the same number of withholding allowances as you claim personal exemptions on your tax return. You can use my article and the IRS Withholding Calculator to adjust your paycheck withholding.
- J. Varela asks, "I have a daughter with my ex-girlfriend and we have joint custody. I pay child support and provide insurance for her. My question is my ex does not work and usually never has is she allowed to have someone else claim my daughter? Such as her grandmother? This has been going on for years and I am just curious. Any response will be greatly appreciated."
I cannot determine what your ex-girlfriend's tax situation is. But here's one of the general rules. In order to claim a child as a dependent, the child must live with you for more than half the year. Since your daughter does not live with you, then you would not be able to claim your daughter as a dependent. Now, who else would be eligible to claim your daughter is irrelevant to your tax situation. As long as the child meets the tests for qualifying child, she can be claimed as a dependent.
- J. Shaylor asks, "Can you take a tax credit for your child if they worked a portion of the year?"
If the child is meets the definition of a qualifying child, then yes you can still claim your child as a dependent. One of the new criteria for a qualifying child is that the child cannot provide more than half of his or her own financial support. (This new support test is not related at all to the age test, as under the old rules.)
- Misty McCumbers asks, "How much do I get for my 9 month old son who was born on 4-15-2005?"
You can claim your son as a dependent, as long as he meets the criteria for a qualifying child. It does not matter when in the year he was born. You still get the full personal exemption.
- M. Boutte asks, "My girlfriend was married the first 5 months of 2005 but has since divorced. She has two dependant children under 17 who live with her full time. Her ex-husband has agreed not to claim either of the kids on his return this year. Consequently, i'm wondering if my girlfriend would be able to file under Head of Household for the year 2005. If not, what would be her best status options. Thank you."
As long as the child meet the criteria of qualifying children, then your girlfriend can claim her children as dependents. Generally, that means the children lived with her for more than six months of the year and that the children did not provide more than half of their own financial support. As an unmarried person with at least one dependent, your girlfriend would be eligible to file as Head of Household.
- J. Finders asks, "What are the rules for claiming a child, when the child lives with both parents for six months each?"
Great question! The new rules say that you can claim a dependent if, among other things, the child lives with you MORE than half the year. So if the children are living with you for EXACTLY half a year, you might be losing out. But not to fear, the new rules have tie-breaker tests for exactly this situation. If the children spend EQUAL time with both parents, then the parent with the highest adjusted gross income gets to claim the kids as dependents.
- J. Robert asks, "Hi Mr. Perez. How are you doing? I'm happy to ask you that question, i would like to prepare my own taxes. I support a child more than 50%. Her mother wants me claim her this year. My question is: what title can i put on? (Child or other). And how many years that takes not to be claimed with that child? Thank you so very much."
I'm doing very well, thank you for asking. There's new rules for claiming a dependent. Please un-learn the old "more than 50%" rule. It no longer applies. Under the new rules, the child needs to live with you for more than half the year, and the child cannot provide more than half of her own support. Also, you must be related to the child in certain ways. However, these new rules only apply for qualifying children -- that is, dependents who are your child, grandchild, etc. It sounds like this child isn't your biological, foster, or adopted child. In that case you would need to follow the rules for "qualifying relatives." For qualifying relatives, there may be a residency requirement. It sounds like this particular child is not related to you except informally. In that situation, the child needs to live with you for an entire calendar year. Now, here's the kicker. This particular child would be a qualifying child of her parent. And "once a qualifying child, always a qualifying child, and never a qualifying relative," according to H&R Block tax expert Kathy Burlison. That means, you cannot claim the child as your dependent, since the child likely meets the criteria to be someone else's qualifying child.
- J. Robert asks a follow-up question, "Can someone unmarried claim a child as a head of household? However the status of that used to be single. What relation can i get if I want to claim my sister's-in law child?"
A niece might qualify as a "qualifying child" under the new rules, since a niece is a descendent of your sister, and thus you would meet the relationship test for qualifying child. However, you need to look at the other three criteria as well. Your neice needs to live with you for more than half the year, must not provide more than half of her own support, and must be under age 19 or under age 24 and a full-time student. So did your niece live with you, or with her mom? If she lived with you both equally, then using the tie-breaker tests, only her mom would be able to claim her as a dependent. If you qualify to claim your neice, the relationship you indicate on Form 1040 is "Neice." If a taxpayer is unmarried and has at least one dependent, then the taxpayer would qualify for the Head of Household filing status.
- K. Goyne asks, "If you have a parent living with you all year, and they are receiving Social Security benefits, but they do not work can, you claim them as a dependent on your taxes?"
Parents would fall under the category of "qualifying relatives" under the new rules for claiming a dependent. Under these rules, you can claim your parents as dependents if they each earn less than $3,200 in taxable income and you provide more than half of their total financial support. If their only source of income is Social Security, then none of their Social Security benefits are taxable, and they would have zero taxable income. In that situation and you provided over half of their financial support, then yes you can claim your parents as dependents. (And they don't have to live with you either, since there's no residency requirement for parents.)
Throughout the tax season I will be answering one tax question per day. Do you have a question? Visit the Ask a Tax Question page. Disagree with my answers? Post your comments in the Tax Forum. Find more answers in the Tax Question of the Day Archive page.