Understanding Dependency Claims

As tax season approaches, it's essential to refresh our understanding of dependency claims and the qualifications that determine who can be claimed as a dependent. Below is a concise overview:

Qualifying Child and Qualifying Relative:

• A dependent is an individual considered the taxpayer's qualifying child or qualifying relative.

• Both a qualifying child and a qualifying relative must meet general requirements to be claimed as a dependent.

General Requirements:

1. Cannot Claim Dependents: The dependent cannot claim any dependents on their own tax return.

2. Citizenship/Residency: The dependent must be a U.S. citizen or national; or a resident of the United States, Canada, or Mexico (exceptions may apply).

3. Marital Status: A married dependent cannot file a joint return, except for specific circumstances.

Qualifying Relative Criteria:

1. Relationship/Household: A qualifying relative must be a member of the taxpayer's family or household.

2. Gross Income: The qualifying relative's gross income must be below the annual exemption amount.

3. Support: The taxpayer must provide at least one-half of the qualifying relative's support.

4. Not a Qualifying Child: A qualifying relative must not be another taxpayer's qualifying child.

5. Any Age: Unlike a qualifying child, a qualifying relative can be of any age.

Dependency Ineligibility:

• If an individual can be claimed as a dependent by another taxpayer, they cannot claim any dependents during the same tax year.

• Married taxpayers filing a joint return, where one spouse qualifies as another taxpayer's dependent, cannot claim dependents on their return.

Understanding these rules is crucial for accurate tax filings. If you have any questions or need personalized assistance, please don't hesitate to reach out.

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About the Author - Mark Neeb, Manager, CPA, ECS Financial Services, joined the firm in 2014 and has over 20 years of experience in public accounting. Mr. Neeb's areas of expertise include business and individual income tax, tax planning, real estate accounting, as well as review and compilation engagements, and financial statement preparation. Mr. Neeb is a licensed CPA in the state of Illinois and holds a Master of Science in Taxation degree from DePaul University, and a Bachelor of Business Administration degree from the University of Wisconsin - Eau Claire.