What Counts as a Dependent for Tax Purposes?

A dependent is an individual who relies on a taxpayer for financial support. Claiming a dependent can make a taxpayer eligible for various tax benefits that may lower their overall tax liability, such as tax credits and deductions.

The ability to claim these benefits hinges on whether the individual meets a specific set of requirements laid out by the Internal Revenue Service (IRS). Understanding the definition of a dependent is the first step for any taxpayer hoping to take advantage of tax provisions designed to assist those who financially support others.

The Two Types of Dependents

The IRS establishes two categories for classifying a dependent: a Qualifying Child or a Qualifying Relative. To claim an individual as a dependent, that person must satisfy all the specific tests for one of these two classifications. An individual cannot be claimed as a dependent unless they fit into one of these categories.

A Qualifying Child is generally a descendant or sibling of the taxpayer who meets specific age, residency, and support requirements. This category is often associated with a taxpayer’s own children but can extend to other close relatives. A Qualifying Relative is a broader category that can include other relatives or even unrelated individuals who live in the taxpayer’s household, with tests focusing more on income and financial support.

Rules for a Qualifying Child

For an individual to be claimed as a Qualifying Child, they must meet five tests. The rules are designed to identify a child who has a close relationship with the taxpayer and relies on them for housing and basic needs.

The relationship test requires the child to be the taxpayer’s son, daughter, stepchild, foster child, brother, sister, half-brother, half-sister, stepbrother, stepsister, or a descendant of any of them, such as a grandchild or nephew. An adopted child is always treated as the taxpayer’s own child, including a child lawfully placed for adoption even if it is not yet final.

The age test has several components. At the end of the tax year, the child must be under age 19 and younger than the taxpayer, or under age 24, a full-time student, and younger than the taxpayer. A person is a full-time student if they are enrolled for the number of hours or courses the school considers full-time for at least five calendar months of the year. No age limit exists for individuals who are permanently and totally disabled.

The residency test mandates that the child must have lived with the taxpayer for more than half of the year. The IRS allows for temporary absences for reasons such as school, vacation, medical care, or military service. If a child was born or died during the year, they are considered to have lived with the taxpayer for the entire year if the taxpayer’s home was the child’s home for more than half the time they were alive.

The support test for a Qualifying Child stipulates that the child cannot have provided more than half of their own support for the year. This allows a child who receives support from multiple sources to still be a Qualifying Child of the parent. The joint return test states the child cannot file a joint tax return with a spouse for the tax year, unless the return is filed only to claim a refund.

Rules for a Qualifying Relative

An individual who does not meet the criteria to be a Qualifying Child may still be claimed as a dependent if they meet the four tests for a Qualifying Relative.

• Not a Qualifying Child Test: The person cannot be the taxpayer’s Qualifying Child or the Qualifying Child of any other taxpayer. This rule ensures that the Qualifying Child rules take precedence.
• Member of Household or Relationship Test: The person must either live with the taxpayer all year as a member of their household or be related to the taxpayer in one of several ways, including as a child, parent, grandparent, sibling, or in-law. These relatives do not have to live with the taxpayer.
• Gross Income Test: The individual’s gross income for the year must be less than a specific amount set by the IRS, which is $5,050 for the 2024 tax year. Gross income includes all income received that is not tax-exempt, such as unemployment compensation.
• Support Test: The taxpayer must provide more than half of the person’s total support for the year. Total support includes the cost of food, lodging, clothing, education, medical expenses, and other necessities. The taxpayer must compare their contribution to the total support the person received from all sources.

Tie-Breaker Rules for Dependents

Situations can arise where a child meets the tests to be a Qualifying Child for more than one person, such as with children of divorced parents or when a child lives with multiple family members. The IRS has established tie-breaker rules to determine which person is entitled to claim the child.

If one of the individuals is the child’s parent, the parent has the primary right to claim the child. If both individuals are the child’s parents and they do not file a joint return, the claim goes to the parent with whom the child lived for the longer period during the tax year.

If the child lived with each parent for an equal amount of time, the parent with the higher adjusted gross income (AGI) for the year gets to claim the child. If none of the individuals eligible to claim the child is a parent, the right to claim the dependent goes to the person with the highest AGI. These rules are applied in a strict order, though a custodial parent may release their claim using IRS Form 8332.

Required Taxpayer Identification Numbers

A taxpayer cannot claim a person as a dependent unless that person has a valid Taxpayer Identification Number (TIN). On the tax return, the taxpayer must provide the name, relationship, and TIN for each dependent. For most dependents, this number will be their Social Security Number (SSN).

The requirement to list the dependent’s SSN is a measure to prevent fraudulent claims, and failure to provide a valid SSN can result in the disallowance of tax benefits. In specific circumstances where a dependent is not eligible for an SSN, other types of TINs may be used. A taxpayer can apply for an Adoption Taxpayer Identification Number (ATIN) for a child being adopted. For certain non-resident or resident aliens, an Individual Taxpayer Identification Number (ITIN) may be required.