Dependents
6-1
Dependents
Introduction
Identifying and determining the correct number of dependents is a critical component of completing the
taxpayer’s return. The deduction for personal and dependency exemptions is suspended for tax years 2018
through 2025 by the Tax Cuts and Jobs Act. Although the exemption amount is zero, the ability to claim a
dependent may make taxpayers eligible for other tax benets. For example, the following tax benets may all
be associated with a dependent: child tax credit, additional child tax credit, credit for other dependents, earned
income credit, child and dependent care credit, head of household ling status, and other tax benets.
See the Volunteer Resource Guide, Tab C, Dependents for helpful probing questions to use when
interviewing the taxpayer.
When the interview is complete, the results are documented on the intake
and interview sheet. This information will be the basis of your entries in the
tax software.
What do I need?
□ Form 13614-C
□ Publication 4012
□ Publication 17
Optional:
□ Publication 501
□ Form 2120
□ Form 8332
Objectives
At the end of this lesson, using your resource materials, you will be able to:
• Determine if a taxpayer may claim a dependent by applying the
applicable dependency tests
Who are dependents?
Dependents are either a qualifying child or a qualifying relative of the taxpayer. The taxpayer’s spouse
cannot be claimed as a dependent. Some examples of dependents include a child, stepchild, brother, sister,
or parent.
Individuals who qualify to be claimed as a dependent may be required to le a tax return if they meet the ling
requirements.
How do I apply the dependency tests?
The Marital Status and Household Information section of the intake and interview sheet addresses the
issues concerning dependency, but you will still need to use your interview skills to clarify whether the
individuals listed are eligible to be claimed as dependents.
Use caution when preparing this section of the taxpayer’s return. Use the Volunteer Resource Guide, Tab C,
Dependents, for guidance on asking probing questions to verify the information on the intake and interview
sheet. Avoid using information from the taxpayer’s prior year documents to complete this section.
How do I use the Volunteer Resource Guide?
Refer to Tab C, Dependents, in the Volunteer Resource Guide for tools to assist you in determining if a
taxpayer may claim a dependent. Whether you are a new or returning volunteer, Tables 1, 2, and 3 provide
interview tips with guidelines and denitions to help you apply the dependency tests. They incorporate all of
the exceptions, such as the special rules for children of divorced or separated parents as well as the special
multiple support rules.
Dependents
6-2
When determining if a taxpayer can claim a dependent, always begin with Table 1: All Dependents. If you
determine that the person is not a qualifying child, then move to Table 2: Qualifying Relative Dependents.
Depending on the taxpayer’s answers, you may also be prompted to use Table 3: Children of Divorced
or Separated Parents or Parents Who Live Apart or you may use the Qualifying Child of More Than One
Person chart. All of these tools are found in the Volunteer Resource Guide, Tab C, Dependents. As you
become more experienced with the qualifying child and qualifying relative rules, you may nd that you
prefer the Overview of the Rules for Claiming a Dependent chart instead.
What tests must be met for all dependents?
A dependent may be either a qualifying child or a qualifying relative. Both types of dependents have unique
rules, but some requirements are the same for both.
To determine if an individual can be claimed as a dependent, begin with the rules that apply to both
qualifying child and qualifying relative dependents:
• Dependent taxpayer test
• Joint return test
• Citizen or resident test
Dependent Taxpayer Test
A taxpayer (or taxpayer’s spouse, if ling a joint return) who may be claimed as a dependent by another
taxpayer may not claim anyone as a dependent on his or her own tax return. Part I of the intake and
interview sheet asks, “Can anyone claim you or your spouse as a dependent?” If taxpayers answer yes,
they cannot claim a dependent. Use your interview skills because some taxpayers, particularly students,
might not be sure of the answer to this question. An individual is not a dependent of a person if that person
is not required to le an income tax return and either does not le an income tax return or les an income
tax return solely to claim a refund of estimated or withheld taxes. If this is the situation, the taxpayer should
answer “no” to “can anyone claim you as a dependent?”
Joint Return Test
A married person who les a joint return cannot be claimed as a dependent unless that joint return is led
only to claim a refund of withheld income tax or estimated tax paid.
example
Ruth, who had no income, was married in November of the tax year. Ruth’s husband had $30,000
income and had a ling requirement. Although Ruth’s father supported her and paid for the wedding, he
cannot claim her as a dependent because she is ling a joint return with her husband.
Citizen or Resident Test
To be claimed as a dependent, a person must be a U.S. citizen, U.S. resident alien, U.S. national, or a
resident of Canada or Mexico.
• If a U.S. citizen or U.S. national legally adopts a child who is not a U.S. citizen, U.S. resident alien, or
U.S. national, this test is met as long as the child lives with the taxpayer as a member of the household
all year. If all other dependency tests are met, the child can be claimed as a dependent. This also
applies if the child was lawfully placed with the taxpayer for legal adoption.
• Foreign exchange students generally are not U.S. residents and do not meet the citizen or resident test;
they cannot be claimed as dependents.
Dependents
6-3
example
Joan, who is a U.S. citizen, adopted an infant boy from Cambodia who lived with her for the entire tax
year. Even though Joan’s child is not yet a U.S. citizen, he meets the citizen or resident test because he
was a member of Joan’s household for the entire year.
What are the tests for a qualifying child?
The next step to determine if the taxpayer has a dependent is to apply the rules for a qualifying child. If
these tests are not met, see if the tests for a qualifying relative are met. Remember, a person must meet the
requirements of either a qualifying child or a qualifying relative to be claimed as a dependent. While reading
about these tests, follow steps 5-9 in the Volunteer Resource Guide, Tab C, Dependents, Table 1.
Relationship
To meet this test, the child must be:
• The taxpayer’s son, daughter, stepchild, foster child (placed by an authorized placement agency), or a
descendant (for example, a grandchild) of any of them
• The taxpayer’s brother, sister, half-brother, half-sister, stepbrother, stepsister, or a descendant (for
example, niece or nephew) of any of them
An adopted child is treated the same as a natural child for the purposes of the relationships described
above. For example, an adopted brother or sister is a brother or sister of the taxpayer. An adopted child
includes a child who was lawfully placed with a person for legal adoption.
Age
To meet this test, the child must be:
• Under age 19 at the end of the tax year and younger than the taxpayer (or the taxpayer’s spouse, if
ling jointly), or
• A full-time student under the age of 24 at the end of the year and younger than the taxpayer (or spouse,
if ling jointly), or
○ To qualify as a student, the child must be enrolled in the number of hours or courses the school
considers full-time during some part of at least ve months of the year. See Publication 17 for
additional details.
• Any age if permanently and totally disabled at any time during the year. An individual is considered
permanently and totally disabled if both of the following conditions apply:
○ He or she can’t engage in any substantial gainful activity because of a physical or mental condition.
○ A doctor determines the condition has lasted or can be expected to last continuously for at least a
year or can lead to death.
Attending an on-the-job training course, correspondence school, or a school oering courses only through the
internet, does not qualify the child as a student.
Residency
To meet this test, the child must have lived with the taxpayer for more than half the year. The taxpayer’s
home is any location where they regularly live; it does not need to be a traditional home. For example, a
child who lived with the taxpayer for more than half the year in one or more homeless shelters meets the
residency test.
Dependents
6-4
Exceptions to the Residency Test
The child is considered to have lived with the taxpayer during periods of time when either the child or the
taxpayer is temporarily absent due to illness, education, business, vacation, military service, institutionalized
care for a child who is permanently and totally disabled, or incarceration.
A child who was born (or died) during the year is treated as having lived with the taxpayer for more than half
of the year, if the taxpayer’s home was the child’s home for more than one-half of the portion of the taxable
year during which the individual was alive.
Taxpayers may claim as a dependent a child who was born or died, or was kidnapped during the year, as
long as the other dependency tests are met.
In the case of a child who was born and died during the year, a SSN is not required but the return cannot be
e-led. The tax return must be mailed. Refer to Publication 17 for specic rules for these rare situations.
A taxpayer may not claim a stillborn child as a dependent.
In most cases, because of the residency test, a child is the qualifying child of the custodial parent. However,
special rules apply to divorced or separated parents or parents who live apart, which are covered later in
this lesson.
Support
To meet this test, the child cannot have provided more than half of his or her own support during the tax
year. This test is dierent from the support test for qualifying relative. A person’s own funds are not support
unless they are actually spent for support. If the taxpayer is unsure whether the child provided more than
half of his or her own support, review the Worksheet for Determining Support in the Volunteer Resource
Guide together.
example
Bob, 22, is a full-time student and lives with his parents when he is not in the dorm. He worked part-time,
but did not pay over half of his total support. Bob meets the relationship, age, residency, and support
tests.
example
Doris, a U.S. citizen, is 8 years old and had a small role in a television series. She made $60,000 during
the tax year, but her parents put all the money in a trust fund to pay for college. She lived with her
parents all year. Doris meets the relationship, age, and residency tests. Doris also meets the support test
since the $60,000 in earnings were not used for her own support. She meets the tests for a qualifying
child.
State benets provided to a person in need, such as welfare, food stamps or housing, are generally
considered support provided by state. A proposed rule on which taxpayers may choose to rely treats
governmental payments made to a recipient that the recipient uses, in part, to support others are treated as
support of the others provided by the recipient, whereas any part of such a payment used for the support
of the recipient would constitute support of the recipient by a third party. For example, if a mother receives
Temporary Assistance for Needy Families (TANF) and uses TANF payments to support her children, the
proposed regulations treat the mother as having provided that support.
On the other hand, if a child receives Social Security benets that are used for the child’s own support, the
benets are considered to be provided by the child.
A scholarship received by a child who is a student isn’t taken into account in determining whether the child
provided more than half of his or her own support.
Dependents
6-5
Can the child be a qualifying child of more than one person?
Although a child could meet the conditions to be the qualifying child of more than one person, only one
taxpayer can claim the child as a qualifying child for the following tax benets (exception: if the special rule
for children of divorced or separated parents or parents who live apart applies):
• Dependent
• Child tax credit
• Head of Household ling status
• Credit for child and dependent care expenses
• Exclusion from income for dependent care benets
• Earned income credit
• Premium tax credit, generally
See the Volunteer Resource Guide, Tab C, Dependents, Qualifying Child of More Than One Person chart.
If two taxpayers have the same qualifying child, then only one taxpayer can claim all of the benets for that
particular qualifying child. They cannot agree to split these benets. The other taxpayer cannot claim any of
the benets, based on the same qualifying child.
To determine which taxpayer can treat the child as a qualifying child and claim the benets, apply
these rules:
• If only one of the taxpayers is the child’s parent, the child is the qualifying child of the parent.
• If the parents le a joint return together and can claim the child as a qualifying child, the child is treated
as the qualifying child of the parents.
• If the parents do not le a joint return together but both parents claim the child, IRS will treat the child
as the qualifying child of the parent with whom the child lived for the longer period of time during the
tax year. If the child lived with both parents the same amount of time, IRS will treat the child as the
qualifying child of the parent who had the higher Adjusted Gross Income (AGI) for the tax year.
• If no parent can claim the child as a qualifying child, the child is treated as the qualifying child of the
person who had the highest AGI for the tax year and who meets the requisite tests.
• If a parent can claim the child as a qualifying child but no parent does, the child is treated as the
qualifying child of the person who had the highest AGI for the year, but only if that person’s AGI is
higher than the highest AGI of any of the child’s parents who could claim the child. If the parents le
a joint return together, this rule allows the parents to divide their combined AGI equally (between
themselves).
Using these tie-breaker rules, taxpayers may be able to choose which one claims the child. If the qualifying
child is claimed on more than one tax return in a given year, IRS will apply these tie-breaker rules to
determine who will receive the benets.
Dependents
6-6
When both taxpayers are the child’s parents and not ling a joint return, they may agree between themselves
who will claim the child. This may occur when the parents are not married but the family lives together.
When a taxpayer’s e-led return is rejected because he or she claimed a dependent that was already claimed
by another person, apply the tie-breaker rules. If the taxpayer is the person eligible to claim the dependent based on
these rules, a paper return must be led.
Publication 17 and Publication 501, Dependents, Standard Deduction, and Filing Information, provide more
information about qualifying children of more than one person.
What are the tests for a qualifying relative?
The tests for qualifying relative are applied only when the tests for qualifying child are not met.
Dependents who do not meet the tests for qualifying child might meet the slightly dierent tests to be a
qualifying relative. In addition to the dependent taxpayer, joint return, and citizen or resident tests, there are
four additional tests that must be met for a person to be a qualifying relative. The tests are:
• Not a qualifying child test
• Member of household or relationship test
• Gross income test, and
• Support test
example
Mary and her 3-year-old daughter, Jane, lived with Mary’s mother, Dorothy, all year. Mary is 25 years
old, unmarried, and has an AGI of $19,000. Dorothy has an AGI of $25,000. Jane’s father didn’t live with
Mary or Jane. Mary has not signed Form 8332 (or a similar statement).
Jane is a qualifying child of both Mary and Dorothy because she meets the relationship, age, residency,
support, and joint return tests for both Mary and Dorothy. However, only one of them can claim Jane.
Jane isn’t a qualifying child of anyone else, including her father.
Mary agreed to let her mother claim Jane. This means Dorothy can claim Jane as a qualifying child for
all of the ve tax benets listed earlier, if the mother qualies for each of those benets (and if Mary
doesn’t claim Jane as a qualifying child for any of those tax benets).
However, if Mary and Dorothy can’t agree, only Mary will be allowed to claim Jane as a qualifying child.
example
Lynne and her mother, Margaret, share a home and both contribute to the household expenses. Lynne’s
twelve-year-old-daughter, Karen, lives with them. Although Karen meets all the conditions to be a
qualifying child for both Lynne and her mother, Karen is considered Lynne’s dependent.
However, if Lynne chooses not to claim Karen, then Margaret may claim Karen as a qualifying child if
Margaret’s AGI is higher than Lynne’s.
example
In the example above, if circumstances are the same except Mary’s AGI is $28,000, only Mary can claim
Jane as a qualifying child. Because Dorothy’s AGI isn’t higher than Mary’s, Dorothy cannot claim Jane.
Dependents
6-7
EXERCISES
Answers are after the lesson summary.
Question 1: All the facts are the same as in the previous example, except that Eva’s gross income is
$25,000, and she is required to le a return. In this situation, are the children Todd’s qualifying rela-
tives? ¨ Yes ¨ No
example
Todd has lived with his girlfriend, Eva, and her two children all year in his home. Eva is not required
to le, and does not le, a tax return this year. Eva and her two children pass the “not a qualifying
child test” to be Todd’s qualifying relatives. If Todd meets all other tests, Eva and her two children are
qualifying relatives. (Eva and Todd’s relationship does not violate local laws.)
Unlike a qualifying child, a qualifying relative can be any age. Turn to the Volunteer Resource Guide, Tab C,
Dependents, Qualifying Relative Dependents table, to follow along as the tests are described.
Not a Qualifying Child Test
A child is not considered a taxpayer’s qualifying relative if the child is the taxpayer’s qualifying child or is the
qualifying child of another taxpayer.
However, there is an exception to this statement. A child may qualify as the taxpayer’s dependent under the
tests for qualifying relative, even if that child is the qualifying child of another taxpayer. This is allowed only
when the child’s parent (or other person for whom the child is a qualifying child) is not required to le an
income tax return and either:
• Does not le a return, or
• Only les to get a refund of income tax withheld or estimated tax paid
Member of Household or Relationship Test
To meet this test, the person must either:
• Live as a member of the taxpayer’s household all year, or
• Be related to the taxpayer in one of the following ways:
○ Child, stepchild, foster child or a descendant of any of them
○ Brother, sister, half-brother, half-sister, stepbrother or stepsister
○ Father, mother, grandparent or other direct ancestor, but not foster parent
○ Stepfather or stepmother
○ Son or daughter of the taxpayer’s brother or sister (nephew or niece)
○ Son or daughter of the taxpayer’s half-brother or half-sister
○ Brother or sister of the taxpayer’s father or mother (uncle or aunt)
○ Son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law
example
Sally has been supporting her friend Ann and Ann’s young son, Bobby. Ann and Bobby lived with Sally
the entire year and meet all the tests to be Sally’s qualifying relatives. Ann worked part-time and made
$3,100 in wages. Ann les a return only to have her withholding refunded. Sally can claim Ann and
Bobby as dependents.
Dependents
6-8
An adopted child is treated the same as a natural child for the purposes of the relationships described
above. For example, an adopted brother or sister is a brother or sister of the taxpayer. An adopted child
includes a child who was lawfully placed with a person for legal adoption.
Any of these relationships that were established by marriage are not ended by death or divorce.
An unrelated person who lived with the taxpayer for the entire year can also meet the member of household
or relationship test. If the relationship violates local laws, this test is not met. For example, if the taxpayer’s
state prohibits cohabitation, then that person cannot be claimed, even if all other criteria are met.
Note that:
• A person is still considered living with the taxpayer as a member of the household during periods
when that person or the taxpayer is temporarily absent due to special circumstances such as illness,
education, business, vacation, military service, and placement in a nursing home.
• Cousins can meet the relationship test for qualifying relative only if they live with the taxpayer for the
entire year.
• Qualifying relatives can be unrelated, as long as they lived with the taxpayer all year.
• A taxpayer may not claim a housekeeper or other household employee as a dependent.
Gross Income Test
To meet this test, the dependent’s gross income for the tax year must be less than the threshold amount.
Refer to the Volunteer Resource Guide for the current year threshold amount. Gross income is all income
in the form of money, property, and services that is not exempt from tax. Specic examples are found in
Publication 17. Remember this test does not apply to qualifying children, only qualifying relatives. For
purposes of this test, the gross income of an individual who is permanently and totally disabled does not
include income from a sheltered workshop.
Support Test
To meet this test, the taxpayer must have provided more than 50% of the person’s total support for the tax
year. Note that this support test is dierent from the one for a qualifying child, which tests whether the child
provided more than one half of their own support.
When calculating the amount of total support, taxpayers should compare their contributions with the entire
amount of support the person received from all sources (such as taxable income, tax-exempt income,
and loans). Review the list of valid support expenses and the Worksheet for Determining Support in the
Volunteer Resource Guide, Tab C, Dependents, or in Publication 17.
example
Susan and Ted are married and le a joint return. They supported Ted’s parents throughout the tax
year. Even though Ted’s parents do not live with Ted and Susan, Ted’s parents meet the member of
household or relationship test.
example
Mary is a live-in nanny for Jack and Jane in exchange for room and board for the entire year. Mary does
not meet the test for qualifying relative.
example
Joe is 65 years old and lives with his son and daughter-in-law. Joe’s taxable pension income for the year
was $10,000. Joe is not a qualied relative because his income exceeds the threshold amount.
Dependents
6-9
State benet payments like welfare, Temporary Assistance for Needy Families (TANF), food stamps, or
housing assistance are generally considered support provided by the state, not by the taxpayer. A proposed rule on
which taxpayers may choose to rely treats governmental payments made to a recipient that the recipient uses, in
part, to support others as support of the others provided by the recipient, whereas any part of such payment used for
the support of the recipient would constitute support of the recipient by a third party. For example, if a mother receives
TANF and uses the TANF payments to support her children, the proposed regulations treat the mother as having
provided that support.
Social Security benets received by a child and used toward support are considered to have been provided by the
child.
A scholarship received by a child who is a student isn’t taken into account in determining whether the child provided
more than half of his or her own support.
Refer to the Worksheet for Determining Support in the Volunteer Resource Guide, Tab C, Dependents, or the
Dependents chapter of Publication 17.
Multiple Support Agreements (Form 2120)
Sometimes no one provided more than half the support of a person. Multiple support means that two or
more people who could claim the person as a dependent (except for the support test) together provide
more than half the dependent’s support. In this situation, the individuals who provide more than 10% of the
person’s total support, and who meet the other tests for a qualifying relative, can agree that one of them will
claim the person as a dependent for any applicable tax benets.
• The taxpayer claiming the dependent must le Form 2120, Multiple Support Declaration or similar
statement, with the tax return.
• The other taxpayers providing over 10% of the person’s support must provide a written and signed
statement agreeing not to claim the dependent for that year. The person who claims the dependent
must keep a copy of this written statement as a record. A list of the statement requirements can be
found in Form 2120 Instructions.
Multiple Support Agreements apply only to a qualifying relative, not to a qualifying child.
If you can claim a person as a dependent only because of a multiple support agreement, that person isn’t a
qualifying person for Head of Household status.
example
Sherrie’s father received $2,700 from Social Security, but he put $300 of it in a savings account and
spent only $2,400 for his own support. Sherrie spent $2,600 of her income for his support, so she has
provided over half of his support.
example
Steve provided $4,000 toward his mother’s support during the year. His mother had nontaxable Social
Security benet payments of $4,800 and tax-exempt interest of $800. She used all of these for her
support. Steve’s mother provided more than half of her total support of $9,600. Therefore, Steve cannot
claim his mother as a dependent.
example
Fred’s father, Charlie, lives with him and receives 27% of his support from Social Security, 40% from
Fred, 24% from Charlie’s brother Ray, and 9% from one of Charlie’s friends. Charlie may be a qualifying
relative for either Fred or Ray because they each provided more than 10% of Charlie’s support, and
together contributed more than 50% toward his support. If they agree that Fred will claim Charlie as a
dependent, Ray will sign Form 2120 and Fred will attach the form to his tax return.
Dependents
6-10
The taxpayers who provide multiple support for a dependent decide among themselves who will claim the
dependent for the year. Volunteer tax preparers do not decide.
Special Rule for Children of Divorced or Separated Parents or Parents Who Live Apart
In most cases, the child is the qualifying child of the custodial parent. However, a child will be treated as the
qualifying child or qualifying relative of his or her noncustodial parent if all the following conditions apply:
This rule does not apply for Head of Household ling status, the credit for child and dependent care expenses,
or the earned income credit. For these benets, the child must meet the residency test. The custodial parent may still
qualify for these provisions even though the noncustodial parent can claim the dependent for other tax benets.
1. The parents
○ are divorced or legally separated under divorce or separate maintenance decrees or written
separation agreements, or
○ lived apart at all times during the last six months of the year whether or not they are or were married
2. The child received over half of his or her support for the year from the parents. (Multiple Support
Agreement rules do not apply.)
3. The child was in the custody of one or both parents for more than half the year.
4. The custodial parent signs a written declaration (Form 8332 or a similar statement) that he or she will
not claim the child as a dependent for the year and the noncustodial parent attaches this declaration
to his or her return. If the decree or agreement went into eect after 1984 and before 2009, the
noncustodial parent may be able to attach certain pages from the decree or agreement instead of Form
8332. For a pre-1985 decree or agreement, see Publication 17.
This special rule is the exception to:
• The residency test for qualifying child
• The support test for qualifying relative
Custodial and Noncustodial Parent
The custodial parent is the parent with whom the child lived for the greater number of nights during the year.
The other parent is the noncustodial parent.
If the parents divorced or separated during the year and the child lived with both parents before the
separation, the custodial parent is the one with whom the child lived for the greater number of nights during
the rest of the year.
A child is treated as living with a parent for a night if the child sleeps:
• At that parent’s home, whether or not the parent is present, or
• In the company of the parent, when the child does not sleep at a parent’s home (for example, the parent
and child are on vacation together).
EXERCISES (continued)
Question 2: Diane and her brother each provided 20% of their grandmother’s support for the year. Two
persons who are not related to Diane’s grandmother, and who do not live with her, provided the remain-
ing 60% of her support equally. Who is entitled to claim the grandmother as a dependent?
Dependents
6-11
example
When Troy turned age 18 in May, he became emancipated under the law of the state in which he lives.
As a result, he is not considered in the custody of his parents for more than half of the year. The special
rule for children of divorced or separated parents does not apply.
If the child lived with each parent for an equal number of nights during the year, the custodial parent is the
parent with the higher adjusted gross income.
If a child is emancipated under state law, the child is treated as not living with either parent. See more
examples and additional information in Publication 17.
Revocation of Release of Claim to an Exemption
Custodial parents can revoke a release of claim to exemption they previously provided to the noncustodial
parent on Form 8332 or a similar statement. The custodial parent must provide, or make a reasonable eort
to provide, the noncustodial parent with written notice of the revocation in the calendar year prior to the tax
year in which the revocation is to take eect. Part III of Form 8332 can be used for this purpose. Attach a
copy of the revocation to the return for each tax year the child is claimed as a dependent as a result of the
revocation.
Tax Software Hint: The tax software determines the taxpayer’s dependents based on the
Dependents/Qualifying Person information entered in the Basic Information section.
Be sure to complete and review all the family and dependent information on the taxpayer’s intake and
interview sheet before entering the data into the tax software.
For detailed instructions on entering a dependent’s information, refer to the Volunteer Resource Guide, Tab
B, Starting a Return and Filing Status.
Tax Law Application
Elaine Smith has one Form W-2 from her clerk job of 36 years, showing wages of $37,000. She has been
divorced from her husband for over 20 years. She pays all the costs of keeping up her home and is the
main provider for her seven-year-old granddaughter, Lisa and her 30-year-old son, Todd. Lisa is Todd’s
niece. Both her son and granddaughter lived with Elaine all year. Her son worked part time and earned
$9,000. He is not disabled. She would like to le a tax return and claim her son and granddaughter as
dependents.
EXERCISES (continued)
Question 3: Ted is divorced and has a daughter who lived with him and his ex-spouse for an equal
number of nights. Ted’s adjusted gross income is $45,000 and his ex-spouse’s adjusted gross income
is $30,000. Who is considered the custodial parent?
example
Chloe has one child, Timmy, and is divorced. During the tax year, Timmy lived with Chloe 210 nights
and with his father 155 nights. Chloe is the custodial parent because Timmy lived with her more nights
during the year.
Dependents
6-12
How do I apply the dependency tests to Elaine’s son?
Use the tables in the Volunteer Resource Guide, Tab C, Dependents, to apply the test to Elaine’s son.
How do I apply the dependency tests to Elaine’s granddaughter?
Use the tables in the Volunteer Resource Guide, Tab C, Dependents, to apply the test to Elaine’s
granddaughter. You will nd that Lisa is a qualifying child of both Elaine and Todd. However, under the
tie-breaker rules, Elaine is entitled to claim Lisa as a dependent because she has the higher AGI.
Dependent/Nondependent Determinations
Elaine can claim her granddaughter as a dependent, but cannot claim her adult son because he does not
meet the gross income test to be Elaine’s qualifying relative.
Summary
For a taxpayer to claim a dependent, the following conditions must be met:
• The taxpayer may not claim a dependent if the taxpayer may be claimed as a dependent on another
taxpayer’s return.
• The taxpayer may not claim a dependent who les a joint return unless the joint return is led only to
claim a refund and no tax liability would exist for either spouse on separate returns.
• A person cannot be claimed as a dependent unless that person is a U.S. citizen, U.S. resident alien,
U.S. national, or a resident of Canada or Mexico, for some part of the year. (There is an exception for
certain adopted children.)
• A dependent must be either a qualifying child or qualifying relative.
EXERCISE ANSWERS
Answer 1: No, since Eva has a ling requirement and her children meet the tests to be Eva’s qualify-
ing children, Todd cannot claim the children as qualifying relatives.
Answer 2: No one is entitled to claim the grandmother as a dependent. The individuals that provided
more than half of the grandmother’s support are not eligible to claim her because they are not related
to her and did not live in the same household all year.
Answer 3: Ted is his daughter’s custodial parent because he had a higher adjusted gross income.
