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Family Tax Topics

Rules for Claiming Dependents on Your Tax Return

Claiming children and other dependents on your taxes can be complicated. Learn who qualifies and how to claim them!

A dependent is a person such as a child or elderly relative that you provide for and can claim for tax purposes. Claiming dependents generally make you eligible for a number of dependent related credits and deductions.

Who qualifies as a dependent?

Prior to 2003, there were 5 or more different definitions of a dependent. In an effort to clarify and streamline parts of the tax code, The Working Family Tax Relief Act (WFTRA) of 2004 created a ‘single’ definition of a child dependent and a non-child dependent. The two types of dependents are referred to as the Qualifying Child or the Qualifying Relative. 

Tip/Help

The Child Tax Credit (CTC) is going back to pre 2021 rules. The credit goes back to $2,000 per child with the first 25%, up to $500, nonrefundable and the remaining unused credit amount, up to $1,500, is the refundable Additional Child Tax Credit (ACTC). A dependent child must be under age 17 to qualify and the taxpayer must have at least $2,500 from a job or self-employment (earned income).

 

Qualifying Child 

If you want to claim a child or dependent on your taxes, your child or dependent must meet the Qualifying Child rules:

  • Relationship Test – The child must be your:
    • Son, daughter, stepchild, adopted child, or eligible foster child – or descendant (for example, a grandchild or great-grandchild).
    • Sibling, half-sibling, stepsibling, or descendant (for example, nephew or niece).
  • Age Test – The child must be under age 19, a full-time student under age 24, or any age if permanently and totally disabled.
    • NOTE: The taxpayer must be older than the child unless the child is disabled.
  • Residency Test – The child must have the same main home as you for more than half the year.
    • The child must be a U.S. citizen, U.S. resident alien, U.S. national, or a resident of Canada or Mexico.
  • Support test - The child cannot provide more than half of their own support.
  • Joint return test - The child cannot file a joint return with someone.
  • Divorced or separated taxpayers – the IRS recognizes the physical custodial parent as the one eligible to claim the dependent. If the custodial parent completes and signs Form 8332 , Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent, and provides it to the noncustodial parent. The noncustodial parent can claim the child tax credit(s) for any eligible children. The child must be a dependent of the custodial parent.
    • A custodial parent is defined by the IRS as the parent a child lived with for more than half the year. The half the year is counted by nights the child slept in the parent’s home or another home but under the parent’s control. For example, spending the night with a friend but living with Dad and he gave permission.
  • If two, or more, taxpayers claim the same child, the IRS will use the Tie-Breaker Rule to determine who is eligible. For more information see your local Tax Pro or go to irs.gov and search on dependent children or the EIC Toolkit.
  • To claim the EITC, the taxpayers must be the custodial parent and they must have earned income from a job or self-employment.
Tip/Help

The child cannot be used by more than one person to claim the EITC. If a child is the qualifying child for you and another person, you will need to decide who will claim that child.

Qualifying Relative

Qualifying relatives can include children who do not meet the Qualifying Child Age Test, other relatives (for example, parents, grandparents, uncles, aunts, and in-laws), and unrelated members of the household. Dependents under the Qualifying Relative status do not qualify the taxpayer for the Earned Income Credit (EIC) or Child Tax Credits (CTC), they do qualify the individual for the credit for other dependents.

A person is your Qualifying Relative if all of the following tests are met:

  • Not a Qualifying Child Test – Your qualifying relative must not be a qualifying child for any other taxpayer.
    • Note: An exception to this rule is when the other taxpayer for whom the child is a qualifying child is not required to, and does not, file a tax return. For example, Amanda and her son, Travis, live with Jeremy all year. Amanda worked during the holiday and earned $3,800. Amanda does not file a tax return because she is not required to so Jeremy can claim Travis as a qualifying relative. Jeremy is unable to claim the Child Tax Credit, Additional Child Tax Credit, or the Earned Income Credit for Travis.
  • Member of Household or Relationship Test – Your qualifying relative must either live with you for the entire year as a member of your household (but the relationship cannot violate local law) or be related to you in one of the following ways:
    • Child (son, daughter, or adopted child), or descendant (for example, grandchild or great-grandchild)
    • Stepchild
    • Sibling, half-sibling, or step sibling
    • Parent or direct ancestor (for example, grandparent or great grandparent)
    • Stepfather or stepmother
    • Uncle or aunt
    • Nephew or niece
    • Father-in-law, mother-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law. Special rules may apply for kidnapped children and for temporary absences due to special circumstances such as illness, education, business, vacation, and military service.
    • Unrelated individual who lived with you for the full year.
  • Gross Income Test – Your qualifying relative cannot have a gross income in excess of the dependent exemption amount for the year. The gross income limit for 2022 is $4,400.
  • Support Test – Generally, you must provide more than half of your qualifying relative's total support. Special rules may apply when more than one person is providing support for an individual or for children of divorced or separated parents.

 

Tip/Help

Generally, you must provide more than half of your qualifying relative's total support.

Who can claim a dependent?

In order to claim a dependent, you (the taxpayer) cannot qualify as a dependent of another taxpayer. Your potential dependent(s) must also meet the rules for Qualifying Child or Qualifying Relative.

Credits and deductions for claiming dependents

  • Earned Income Tax Credit – The EITC is a refundable credit worth up to $6,935 for qualifying taxpayers with moderate to low income. Taxpayers can get EITC with or without children, but the credit amount is higher for those who have children.
  • Child Tax Credit and Additional Child Tax Credit - The child tax credit is for taxpayers with dependent children under age 17. The child tax credit is a refundable credit up to $2,000 for qualifying dependent children under age 17. The first $500 per child is always the nonrefundable Child Tax Credit. Once all income and other taxes have been eliminated by this and other credits, any excess Child Tax Credit up to $1,500 per child becomes the Additional Child Tax Credit and can be refunded.
  • Credit for other Dependents – This applies to the qualifying relative part of the child tax credit. It is a nonrefundable credit of up to $500 per qualified qualifying relative or a qualifying child 17 or older.
  • Child and Dependent Care Credit – This is a nonrefundable credit for daycare for a qualified dependent while the taxpayer works. The credit is between 20% and 35% of up $3000 ($6,000 if two or more individuals in care) of expenses. Most taxpayers will be eligible for the 20% credit.
  • Adoption Credit – This is a nonrefundable credit of up to $14,890 of expenses paid for adopting a child who is not your stepchild. The credit is nonrefundable but can be carried over until used, or up to five years whichever comes first.
  • American Opportunity Tax Credit & Lifetime Learning CreditCredits based on qualified education expenses for yourself, your spouse, or your dependent while in college or a trade school.
  • Medical expenses - You may claim medical expenses you paid for your child or another relative you were unable to claim as a dependent, due to the other parent or another family member claiming the individual.

 

Children and Dependents

Frequently Asked Questions

Questions and Answers: Children and Dependents

Why is my refund so late if I claim EITC?
The PATH Act requires the IRS to hold all refunds related to the EITC or ACTC until after February 14. This allows the IRS the ability to review returns and check for tax fraud or tax id theft.

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