How to Claim a Dependent on Your Tax Return

Claiming a dependent on your tax return can significantly reduce your tax liability and make you eligible for valuable tax credits. These credits include the child tax credit and child and dependent care credit, which reduce your taxable income. Additionally, claiming a dependent may qualify you as head of household, a more beneficial filing status than a single filer.

Before claiming someone as a dependent on your tax return, you must ensure they meet all the Internal Revenue Service (IRS) requirements.

Key Takeaways

• Claiming a dependent can help reduce your taxable income and make you eligible for various tax credits.
• The IRS recognizes two types of dependents: qualifying children and qualifying relatives.
• There are six main tests to determine if a child qualifies as a dependent for tax purposes.
• Qualifying relatives can also be claimed, though they must meet additional criteria.

Who Is a Tax Dependent?

A dependent is generally defined as someone you financially support and who meets specific IRS criteria. Not everyone you take care of qualifies as a dependent.

The IRS allows two types of tax dependents, each with its own set of rules:

• Qualifying children
• Qualifying relatives

Claiming Children as Tax Dependents

To claim a child as a dependent, they must meet all six of the following tests:

• Citizenship Test: The child must be a U.S. Citizen, U.S. resident alien, U.S. national, or a resident of Canada or Mexico. Adopted children who are not U.S. citizens but live with you for the full year are also eligible.
• Relationship Test: A qualifying child can be your biological child, adopted child, stepchild, or foster child. Sibling, half-sibling, stepsiblings, or a descendant of any of the above (a grandchild or nephew, for example), also qualify.
• Residency Test: A qualifying child has to live with the taxpayer for more than half the year. Temporary absences due to school, vacation, custody arrangement, an illness, military duty, or business, that child will still meet the residency test.
• Age Test: A qualifying child must be under the age of 19 or under 24 if a full-time student for at least five months of the year. There is no age limit for children who are permanently and totally disabled. Unless the child is permanently and totally disabled, they also need to be younger than you (or your spouse if you file a joint return).
• Support Test: You must provide more than half of the child’s financial support. If you’re trying to claim an individual who has a job and partially takes care of themselves, you have to make sure you can prove that.
• Joint Return Test: If a dependent is married and files a joint return with a spouse, the dependent does not count as a qualifying child. The only exception to this rule is if the dependent and the spouse are not required to file taxes and only do so to get a refund.

Additional Tests for Tax Credits

Certain tax credits, like the Child and Dependent Care Credit or Child Tax Credit, have additional or modified requirements. For example:

• Child and Dependent Care Credit: The dependent must be under the age of 13, unless permanently or totally disabled. If parents are divorced, the custodial parent is the one eligible to take the child and dependent care credit, whether or not the noncustodial parent claims the child as a dependent on their tax return.
• Child Tax Credit: For 2023, the credit is $2,000 for qualifying children under the age of 17 at the end of the year. Your annual income cannot exceed $200,000 ($400,000 if filing a joint return).
• Earned Income Credit (EIC): For EIC eligibility, the child has to meet four of the basic dependent tests: relationship, residency, age, and joint return. In addition to meeting those four basic tests, the child must have lived with you in the U.S. for more than half the year.

Tie-Breaker Rules for Determining a Qualifying Child

If two taxpayers both claim the same child, the IRS uses the following tie-breaker rules to determine who gets the benefits:

• If only one taxpayer is the child’s parent, the child will be the qualifying child of the parent.
• If both taxpayers are the child’s parents and they do not file jointly, the parent with whom the child lived for the “longest period of time during the year” gets the benefit.
• If the child lived with both parents for an equal amount of time, the parent with the highest adjusted gross income (AGI) claims the child.
• If neither taxpayer is the child’s parent, the taxpayer with the highest AGI claims the benefit.

Claiming Relatives as Tax Dependents

Some dependents don’t fall into the category of a qualifying child but can still qualify under the IRS rules for qualifying relatives. In addition to the joint return and citizenship tests, a qualifying relative must meet these additional criteria:

• Qualifying Child Test: To be a qualifying relative, the individual cannot be a qualifying child for anyone else. In other words, a dependent is only a qualifying relative if they do not meet the qualifying child tests for you or another taxpayer.
• Member of Household or Relationship Test: A qualifying relative can be a child or descendant of a child, a sibling, a stepsibling, a descendant of a sibling, a parent or stepparent, an ancestor of a parent (a grandparent, great-grandparent, etc.), an uncle or aunt, a father-in-law or mother-in-law. These relatives do not have to live with you. Alternatively, the qualifying person could be an individual who lives with the taxpayer for the entire year, regardless of whether the individual is related to the taxpayer.
• Gross-Income Test: The dependent’s income cannot be above a certain amount. For the 2023 tax year, it’s $4,700.
• Support Test: For a dependent to be a qualifying relative, the taxpayer must have provided more than half of their support. Note the difference between the support test for a qualifying relative and a qualifying child. For a qualifying child, the taxpayer has to prove that the dependent (the child) provided half or less than half of their own support; for a qualifying relative, the taxpayer has to prove that the taxpayer provided more than half of the dependent’s support.

Important

For 2023 tax returns, the standard deduction amount for an individual who may be claimed as a dependent by another taxpayer cannot exceed $1,150, or the sum of $400 and the individual’s earned income, whichever is greater.

The Bottom Line

Determining whether you can claim someone as a dependent can be tricky. Accurate claims of dependents can significantly reduce your taxable income and help you qualify for tax credits that lower your overall tax burden. If you’re unsure whether someone qualifies, review the IRS guidelines or contact the IRS for clarification at 1-800-829-1040 or call a local IRS office.