tax tips — March 06, 2017

Claiming Dependents on Your Tax Return

by Susannah McQuitty

A cute baby girl grins from her car seat in big sunglasses.

Before you get too deep into filing your taxes, you’ll run into questions about your dependents. Claiming dependents knocks $4,050 right off the top of your taxable income per person. Can I get a “heck yes?”

Let’s take a look at how this whole claiming dependents thing works.

General rules for claiming a dependent

There are a few basic requirements that apply to any dependent you want to claim. The most important factor is support: You must have paid for at least 50% of the person’s basic needs — food, shelter, clothing, etc. – for the year in question.

To claim a dependent, you must have provided at least 50% of the person’s basic needs.

The person must also be a U.S. citizen, U.S. national, or a resident alien, and must have a Social Security Number (SSN), Individual Taxpayer Identification Number (ITIN), or an Adoption Taxpayer Identification Number (ATIN).

With the basics out of the way, it’s time to dig a little deeper into specific requirements for claiming different kinds of dependents.

Claiming children

Not that you’d want to, but you can’t go around claiming every kid you run into (even if you feel more than entitled to a tax break for babysitting your neighbor’s three spoiled little angels last summer).

On top of having provided basic needs, any child dependents must have lived with you for at least half of the year. Child dependents must also be related to you in some way, whether as a son or daughter, stepchild, foster child, brother, sister, etc. And, though this may sound like a given, the child must also be younger than you (or your spouse, if you’re married filing jointly), unless the child is disabled.

Claiming adult dependents

Now this may come as a surprise, but dependents don’t have to be kids. If you’re paying basic needs for an adult who’s either related to you or has lived with you the whole year, you can claim them as a dependent.

Adult dependents can have their own tax returns and even be married, but here’s the catch – they must not have filed a joint tax return for the year unless it’s just to claim a refund, and they cannot have a gross yearly income over $4,050. (That’s the amount for 2016 returns — it usually changes each year.)

Siblings can use Form 2120 to take turns claiming parental dependents.

Claiming parents

Here’s the tricky thing about claiming parents: Several people can contribute to a parent’s household expenses, making it unclear who gets to claim the dependent parent when no one person contributed at least 50% of support.

Fortunately, the IRS facilitates an agreement among the contributors with Form 2120 – Multiple Support Declaration. Anyone who contributes more than 10% of the yearly total expense amount should sign the form and give it to the person who will claim the parent. Family members can even take turns claiming the dependent in different tax years.

Claiming dependents can do wonders to reduce your taxable income, which means a bigger refund once you file. And, as always, we’ll make it as simple as possible when you file with to add dependents and get all the credits and deductions you qualify for.


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