Time flies when you're having fun. Before you know it, another year has passed and—bam!—it’s time to file your taxes again. If that has you feeling like a deer in headlights and scrambling to figure out dependents and tax credits—take a deep breath. Let’s walk through who qualifies as a dependent, who can claim a dependent, and what tax credits might be available to you. Sound good?
Let’s start with the easiest qualifier: If someone else claims you as a dependent, you can’t claim any dependents. On the flip side, if you claim someone as a dependent, no one else can claim you as a dependent. No double-dipping allowed!
Also, in any given year, a dependent can only be claimed by one taxpayer. So, for example, if you and your spouse were no longer married and not filing a joint return, your child could only be claimed on one of your tax returns—not both. The child would have to be claimed by either you or your ex-spouse.
Who Qualifies as a Dependent?
The IRS defines two categories someone must fall into to be considered a dependent: a qualifying child or a qualifying relative.
Taxes shouldn't be this complicated. Let us help.
Sure, that doesn't sound all that complicated—there are only two options!—but the key word to keep in mind here is qualifying.
For starters, to fit either of these categories, the person must be a U.S. citizen, U.S. national, U.S. resident, or resident of Canada or Mexico.1
Let’s take a closer look.
Claiming a Qualifying Child
To claim a child as your dependent, they must meet the following qualifications:
- They can be your daughter, son, stepchild, adopted child, foster child or grandchild; or they can be your brother, sister, half-brother, half-sister, stepbrother, stepsister, or a descendant of any of them (aka your niece or nephew).
- They must be under the age of 19 by the end of the tax year and also be younger than you. If they are a student, they must be under the age of 24. Anyone that has a permanent disability, regardless of age, also qualifies.
- They must live with you for more than half the year.
- They can’t make more than half of what it costs you to support them. A lot of teens have jobs—and that’s great—just be sure you know if your child’s income crosses that threshold.
- They can't also file a joint return for the year. What this means is that you would not be able to claim someone who is married and also filing a joint tax return. For example, let’s say you have a recently married, college-aged child. If they file a joint tax return with their spouse, you can’t also claim them as a dependent—even if you supported them for most of the year.
Claiming a Qualifying Relative
Figuring out if your relative qualifies as a dependent can be tricky. For one thing, they don’t even have to be a relative (more on that below). Let’s look at the key requirements so you can get the tax breaks you deserve:
- They don’t have to be a relative—but if they aren’t, they do have to live with you for the entire year.
- If they’re a relative, they don’t have to live with you.
- They can be any age—your great-grandfather can be your dependent.
- You have to provide more than half of their total support for that year.
- Their gross income (total income before any taxes or deductions) for the year must be less than $4,200.
- They can’t already be claimed as a dependent on another taxpayer's return.
Of course, there are some exceptions and special circumstances for dependents, so the best way to make sure all your bases are covered is to connect with a tax pro to help you wade through the details.
How Do I Claim Someone as a Dependent?
Okay, now that you've got some clarity around the qualifications of claiming someone as a tax dependent—how do you actually do it?
Claiming a dependent on your tax return is actually pretty simple. On the first page of your return (aka form 1040), you’ll just enter each name, their personal information, and their relationship to you, then check which dependent category they fall under. Then you’ll calculate the child tax credit on the second page, if applicable.
What Dependent Tax Credits Are Available?
If you do claim a qualifying child as a dependent (and meet the other specifications), you may be able to claim a Child Tax Credit.2 The maximum amount of credit that you'd be eligible for is $2,000 per qualifying child (doubled because of the Tax Reform Bill!). The income threshold where the child tax credit begins to phase out has also increased from $110,000 to $400,000 for married couples filing jointly. What this means is that even more families with children under the age of 17 qualify for the larger credit. Heck yeah!3 Now, if you claim a qualifying relative—someone who is not your child—you would qualify for a non-refundable tax credit of up to $500 per qualifying person. You may also be able to claim this credit if you have children over the age of 17 or another qualifying dependent.4
Get Your Taxes Done Right
We know taxes can be tricky and confusing, especially when it comes to claiming dependents and figuring out tax credits. But don’t worry—you don't have to tackle this on your own! Our tax Endorsed Local Providers (ELPs) are ready to help guide you through the tough parts of your tax return so you can file with confidence.