Can You Claim Dependents If You Don’t Have Any?
Unravel the IRS definition of a tax dependent. Learn who qualifies and how claiming them can impact your tax return, even if they're not a traditional family member.
The Internal Revenue Service (IRS) establishes specific criteria for claiming a dependent on a tax return. Meeting these rules can reduce a taxpayer’s overall tax liability through various tax benefits.
Defining a Dependent
The IRS defines a dependent as an individual, other than the taxpayer or their spouse, who meets specific requirements. Claiming a dependent can unlock tax credits and deductions. The IRS categorizes dependents into two types: a Qualifying Child and a Qualifying Relative. Each category has its own rules regarding relationship, age, residency, and financial support.
Qualifying Child Requirements
To be considered a Qualifying Child, an individual must satisfy several tests:
Relationship Test: The child can be a son, daughter, stepchild, foster child, brother, sister, half-brother, half-sister, stepbrother, stepsister, or a descendant of any of them (e.g., grandchild, niece, nephew). An adopted child is treated the same as a natural child.
Age Test: The child must be under 19 years old at the end of the tax year, or under 24 if a full-time student. There is no age limit if the child is permanently and totally disabled.
Residency Test: The child must have lived with the taxpayer for more than half of the tax year. Temporary absences for school, vacation, medical care, or military service count as time lived with the taxpayer.
Support Test: The child cannot have provided more than half of their own financial support for the year.
Joint Return Test: The child generally cannot file a joint tax return for the year, unless it is filed solely to claim a refund of withheld income tax or estimated tax paid.
Qualifying Relative Requirements
To be considered a Qualifying Relative, an individual must meet a distinct set of criteria:
Not a Qualifying Child: The person cannot be a qualifying child of any taxpayer.
Relationship or Member of Household Test: The person is a specific familial relative (e.g., parents, grandparents, siblings, aunts, uncles, nieces, nephews, certain in-laws), or they lived with the taxpayer all year as a member of their household. A person not related by blood can qualify if they lived with the taxpayer for the entire year.
Gross Income Test: The person’s gross income for the tax year must be less than $5,050 for the 2024 tax year.
Support Test: The taxpayer must have provided more than half of the person’s total support for the year.
Joint Return Test: The person generally cannot file a joint tax return for the year. An exception exists if the joint return is filed only to claim a refund of withheld income tax or estimated tax paid.
Tax Implications of Dependent Status
Claiming a dependent on a tax return can lead to several tax benefits, including specific credits and favorable filing statuses.
One significant benefit for a qualifying child is eligibility for the Child Tax Credit (CTC). For the 2024 tax year, this credit can be worth up to $2,000 for each qualifying child under the age of 17. A portion of the Child Tax Credit may be refundable up to $1,700 per qualifying child for 2024. The full credit begins to phase out for taxpayers with modified adjusted gross incomes above $200,000 for single filers or $400,000 for those married filing jointly.
For a qualifying relative, or a qualifying child who does not meet the CTC criteria (such as being 17 or older), taxpayers may be eligible for the Credit for Other Dependents (ODC). This is a non-refundable credit of up to $500 per qualifying dependent. The ODC also begins to phase out at the same income thresholds as the Child Tax Credit.
Having a qualifying person can also allow an unmarried taxpayer to file as Head of Household, which typically offers a lower tax rate and a higher standard deduction compared to filing as single. This filing status requires the taxpayer to pay more than half the cost of maintaining a home for themselves and the qualifying person for more than half the year.
Other tax considerations include the Earned Income Tax Credit (EITC), which can provide a refundable credit for low-to-moderate-income workers, with higher credit amounts for those with qualifying children. For 2024, the maximum EITC ranges from $632 with no qualifying children to $7,830 with three or more qualifying children. The Credit for Child and Dependent Care Expenses can help offset costs paid for the care of a qualifying child under 13 or a disabled dependent or spouse. This non-refundable credit for 2024 can be 20% to 35% of eligible expenses, up to $3,000 for one qualifying individual or $6,000 for two or more.