A Guide to Claiming Dependents

Claiming dependents on your tax return can make a big difference in the credits you qualify for and the tax refund you will receive. Knowing which dependents qualify on your tax return is critical. Claiming dependents who are being claimed by someone else or who don't meet the criteria for dependents will cost you big in an audit. The number of dependents you claim counts as exemptions and reduces your tax debt. Plus it allows you to claim credits you wouldn't otherwise be able to claim, like the child tax credit. If you incorrectly claim a dependent, you will not have qualified for these credits or exemptions and will also owe interest and penalties.

Qualifying Children

There are four criteria that you must meet in order to claim a child on your income taxes. The child must be your child, stepchild, foster child, nephew/niece, grandchild, or brother/sister. The child must live with you more than half of the year. This can be an issue with divorced parents if the child spends equal time with both parents. The IRS considers the parent who has the child even one day more than the other parent to be the one eligible to claim the child on the taxes. If the parents are really equal on time, the IRS allows the parent who makes more money to claim the child. If both parents claim the child on their taxes, an audit is likely. In addition, the child must be under nineteen years old or twenty-four if a full-time student. If the child has a qualifying disability, the parents can claim him or her indefinitely, no matter the age. The qualifying child must not have provided his or her own support for more than half the year. If you meet all of these criteria, you can claim the child on your taxes, along with any applicable credits, like the child tax credit and child care credit.

Qualifying Relative

Another kind of relative can be claimed as a dependent if he or she meets the criteria. There is a long list of who is considered a relative, and it includes parents, grandparents, aunts and uncles, siblings, nieces and nephews, cousins and stepparents and step-siblings. Boyfriends, girlfriends and domestic partners can be claimed only if they lived with the taxpayer for the entire year, whereas other relatives need to live with them only for more than half of the year. If you are claiming a relative, he or she may not be a qualifying child on someone else's return. For example, if you are claiming your niece as a dependent, your niece's parents must not also be claiming her. Dependent relatives must have made less than $3,650 for the year for you to claim them. You must have provided their support for more than half of the year. Lastly, your relative must be a citizen or resident alien of the United States, Canada or Mexico.

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