A dependent is a person other than the taxpayer or spouse who entitles the taxpayer to claim a dependency exemption.
Each dependency exemption decreases income subject to tax by the exemption amount.
For 2014, the exemption amount is $3,950.
A taxpayer cannot claim a dependency exemption for a person who can be claimed as a dependent on another tax return.
The term "dependent" means a "qualifying child" or a "qualifying relative."
A. To claim a dependency exemption for a qualifying child, all of the qualifying child dependency tests must be met:
- Dependent Taxpayer Test
- Joint Return Test
- Citizen or Resident Test
- Relationship Test
- Age Test
- Residency Test
- Support Test
B. To claim a dependency exemption for a qualifying relative, the person must meet the following tests:
- Dependent Taxpayer Test
- Joint Return Test
- Citizen or Resident Test
- Not a Qualifying Child Test
- Member of Household or Relationship Test
- Gross Income Test
- Support Test
All of the following tests must be met to claim a dependency exemption under the rules for a qualifying child.
Dependent Taxpayer Test — Qualifying Child
If you could be claimed as a dependent by another person, you cannot claim anyone else as a dependent. Even if you have a qualifying child or a qualifying relative, you cannot claim that person as a dependent.
Joint Return Test — Qualifying Child
To meet this test, the child must be:
Unmarried,
Married but does not file a joint return, or
Married and files a joint return only to claim a refund of withheld tax, neither the dependent nor spouse can claim personal exemption on their joint return
Citizen or Resident Test — Qualifying Child
To meet this test, the child must be:
A U.S. citizen or resident or
A resident of Canada or Mexico
Relationship Test — Qualifying Child
To meet this test, the child must be:
Your son, daughter, stepchild, eligible foster child, adopted child, or a descendant (for example, your grandchild) of any of them, or
Your brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant (for example, your niece or nephew) of any of them.
Age Test — Qualifying Child
To meet this test, the child must be:
Under age 19 at the end of the year and younger than you (or your spouse if filing jointly)
A full-time student under age 24 at the end of the year, and younger than you (or your spouse if filing jointly)
Permanently and totally disabled at any time during the year, regardless of age.
Residency Test — Qualifying Child
To meet this test, the child must:
Have lived with you for more than half of the year
Meet one of the exemptions listed below:
Temporary absences — illness, education, business, vacation, or military service
Death or birth of child — a child who was born or died during the year
Support Test — Qualifying Child
To meet this test, the child must:
Not have provided more than half of his or her own support
Note: There are special rules for a child that is the "qualifying child" of more than one person. Do research or get professional advice if you encounter this situation.
Qualifying Relative
All of the following tests must be met to claim a dependency exemption under the rules for a qualifying relative.
Dependent Taxpayer Test — Qualifying Relative
If you could be claimed as a dependent by another person, you cannot claim anyone else as a dependent. Even if you have a qualifying child or qualifying relative, you cannot claim that person as a dependent.
Member of Household or Relationship Tests — Qualifying Relative
Live with you all year as a member of your household,
OR
Be related to you in one of the allowable ways under Relatives who do not have to live with you.
Taxpayers will meet this test for persons
who are relatives, even if the persons are not members of the taxpayer's household for the entire year.
who are not relatives if the persons are members of the taxpayer's household for the entire year.
Member of Household Test — Qualifying Relative
Taxpayers will meet the member of household test for persons who live with them under the following conditions:
The dependent does not have to be related to the taxpayer.
The dependent must live with the taxpayer all year except for temporary absences. (Temporary absences include attending school, taking vacations, and staying in the hospital.)
The relationship between the taxpayer and the dependent must not violate local laws
Relationship Test — Qualifying Relative
Taxpayers will meet the relationship test if their relatives are one of the following:
- child
- parent
- brother/sister
- stepparent
- stepchild
- stepbrother/stepsister
- half brother/half sister
- grandparent
- grandchild
- son-in-law/daughter-in-law
- mother-in-law/father-in-law
- brother-in-law/sister-in-law
If related by blood, relatives also include
- uncle/aunt
- niece/nephew
Tax Tip
Cousins do not meet the relationship test.
Relatives do not have to be members of the taxpayer's household.
Relationships established by marriage are not ended by death or divorce. For example, a daughter-in-law is a relative to her in-law parents even after the death of their son (her husband).
Tax Tip
There are special rules for children born during the year, adopted children, and foster children.
Remember: To claim a dependency exemption, all tests must be met, including either the relationship test or the member of household test.
Joint Return Test — Qualifying Relative
Taxpayers will meet this test for persons who are
unmarried,
married but do not file a joint return, or
married and file a joint return only to claim a refund of withheld tax; neither would have a tax liability on Separate returns; neither the dependent nor spouse can claim personal exemptions on their joint return.
Remember: To claim a dependency exemption, all tests must be met.
Citizen or Resident Test — Qualifying Relative
Taxpayers will meet this test for persons who are, for some part of the year,
U.S. citizens, residents, or nationals or
residents of Canada or Mexico.
Not a qualifying Child Test — Qualifying Relative
A child is not your qualifying relative if the child is your qualifying child or the qualifying child of anyone else.
Gross Income Test — Qualifying Relative
Taxpayers will meet this test for persons whose gross incomes are less than the exemption amount.
In 2014, the exemption amount is $3,950.
Gross Income
is all taxable income in the form of money, property, and services;
includes unemployment compensation and certain scholarships; and
does not include welfare benefits and nontaxable Social Security benefits.
Remember: To claim a dependency exemption, all seven tests must be met.
Support Test — Qualifying Relative
Taxpayers will meet this test if the taxpayer provided more than half of a person's total support for the entire year.
Total support items include
- food
- clothing
- shelter
- education
- medical and dental care
- recreation and transportation
- welfare
- food stamps
- housing provided by the state
Compare the dollar value of the support provided by the taxpayer with the total support the person received from all sources.
Tax Tip
There are special rules for dependents who receive support from multiple sources and for children of divorced or separated parents.
Important Point: The gross income test considers the dependent's taxable income. The support test considers all income, taxable and nontaxable.
Remember: To claim a dependency exemption, all seven tests must be met.
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