Questions and Answers
Who is a dependent?
A dependent is a person other than the taxpayer or spouse who qualifies the taxpayer to claim a dependency exemption.
Which of the following rules apply for claiming dependents? (Select all that apply)
What are the tests to determine if a person is a qualifying child?
Relationship, age, residence, support, joint return.
What is the relationship test for a qualifying child?
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What age qualifies a child as a dependent?
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What is required to meet the support test for a qualifying child?
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How long must a qualifying child reside with the taxpayer?
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What conditions allow a taxpayer to claim a married person as a dependent?
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What is required to claim a qualifying relative?
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Study Notes
Dependents Overview
- A dependent is a qualifying child or qualifying relative, critical for claiming a dependency exemption.
- For 2016, each dependency exemption reduces taxable income by $4,050.
- A person cannot be claimed as a dependent on multiple tax returns.
Rules for Claiming Dependents
- A taxpayer cannot claim a dependent if they (or their spouse, if filing jointly) can be claimed by another taxpayer.
- Married individuals filing jointly can only be claimed as dependents if their return is solely for a refund and they owe no tax.
- Dependents must be U.S. citizens, resident aliens, U.S. nationals, or residents of Canada/Mexico.
- Dependents must meet criteria as either a qualifying child or qualifying relative.
Qualifying Child
- A qualifying child must pass tests related to relationship, age, residency, support, and joint return status to qualify for dependency exemption.
Qualifying Child: Relationship Test
- The relationship test requires the child to be the taxpayer's son, daughter, stepchild, or a descendant, or a sibling or descendant thereof.
Qualifying Child: Age Test
- To meet the age test, the child must be permanently disabled, under 24 and a full-time student, or under 19 years of age.
- Children born and dying in the same year are considered qualifying, but stillborn children do not qualify.
Qualifying Child: Support Test
- A qualifying child must not provide more than half of their own support, which includes household expenses and specific personal expenses.
- Calculation involves assessing funds at the beginning and end of the year and all money received in between.
Qualifying Child: Residency Test
- The residency requirement mandates that the child must live with the taxpayer for more than half the year, unless exceptions apply (e.g. illness, education, absences).
- A child born and dying within the same year qualifies, while stillborn children do not meet this requirement.
Qualifying Child: Joint Return Test
- A taxpayer cannot claim a married child as a dependent unless they file jointly for a refund without claiming their personal exemption or meet certain conditions when filing separately.
Qualifying Relative
- A qualifying relative must meet the criteria of not being a qualifying child, having a relationship or residing in the taxpayer's household, meeting gross income limits, and support test conditions.
Qualifying Relative: Member of Household
- To qualify, a relative can either be a member of the taxpayer's household or have a specified relationship to the taxpayer.
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Test your understanding of dependents in tax scenarios with these flashcards. Each card helps clarify who qualifies as a dependent, and the tax implications related to dependency exemptions. Perfect for students studying tax law and financial principles.
