These Rules Apply for 2004 and Earlier Tax YearsLaws applying to 2005 can be found at Claiming a Dependent.
Old Rules for Claiming a DependentYou can claim a dependent on your tax return if you meet all five tests:
- Gross income: The dependent earns less than $3,100 in income during the year,
- Total Support: You provide over half of the dependent's total support during the year,
- Relationship: You are related to the dependent in certain ways,
- Joint Return: If the dependent is married, the dependent cannot file a joint return with his or her spouse.
- Citizenship: The dependent must be a citizen or resident alien of the United States, Canada, or Mexico.
Each criteria has more detailed criteria and execeptions. So let's examine each one carefully.
Gross Income TestGenerally speaking, a dependent is someone you support. So, logically, that person should not be making enough money to support himself or herself.
You cannot claim a dependent who earns $3,100 or more. Exceptions to this rule are children under age 19, or children under age 24 who are full-time students. The children must be under age 19 or 24 at the end of the tax year. If the child has turned 19 during the year, then the child must be a full-time student for you to still claim him or her as a dependent. If the child has turned 24 during the year, then you can no longer claim the him or her as your dependent. If you support someone older than 19 (or 24) who has no income, or under $3,100 in income, then you may be able to claim this person as a dependent if you meet the other four tests.
Total Support TestYou must provide over half of a person's total support during the year. Let's say two people equally support a child and split all expenses exactly 50-50. Then neither person can claim the child as a dependent, because no one provides over half of the child's support.
There are two exceptions for the Total Support Test. If multiple people support a single person, they may file a Multiple Support Agreement with the IRS to allow one person to claim the supported person as a dependent. For example, let's say three sons all equally support their mother. Since no one provides over half the mother's support, they could file a Multiple Support Agreement (Form 2120) to allow one of the sons to claim the mother as a dependent.
The second exception is for children of divorced parents. Generally, the custodial parent is allowed to claim the child as a dependent. Three situations will allow the dependent to be claimed by someone other than the custodial parent. (1) all parties supporting a child file a Multiple Support Agreement. A Multiple Support Agreement (Form 2120) would have to filed with the IRS. (2) The custodial parent releases his or her right to claim the dependent to the noncustodial parent. The Release of Claim to Exemption (Form 8332) would have to be filed and attached to the noncustodial parent's tax return. (3) A divorce decree finalized before 1985 grants the non-custodial parent the right to claim the dependent.
Relationship TestThe dependent must be related to the taxpayer is one of the following ways.
- son or daughter, grandson or granddaughter, great grandson or great granddaughter, stepson or stepdaughter, or adopted child,
- brother or sister,
- half-brother or half-sister,
- step-brother or step-sister,
- mother or father, grandparent, greatgrandparent,
- stepmother or stepfather,
- nephew or niece,
- aunt or uncle,
- son-in-law, daughter-in-law, brother-in-law, sister-in-law, father-in-law, or mother-in-law, or
- foster child who lived in the home an entire tax year.
These are the only allowable relationships. You cannot claim your cousin, your friends, your boyfriend or girlfriend, or your domestic partner as a dependent. Relationships established marriage do not end with death or divorce. So if you support your mother-in-law, you can claim her as a dependent even if you and your wife are divorced.
Joint Return TestIf you support someone who is married, you cannot claim the person as a dependent if he or she files a joint return. For example, you support your mother-in-law, who is married and files a joint return with her husband. You cannot claim your mother-in-law as a dependent, because she files a joint return.
The only exception is for married children. You can claim your son or daughter as a dependent even if he or she is married and filed a joint return. However, the married child and spouse filed a tax return only to claim a refund, and were otherwise not required to file a return.
Citizenship TestYour dependent must be a citizen or resident alien of the United States, Canada, or Mexico at some time during the year.