Parents who have adult children who still depend on them financially may wonder if they can claim them as dependents on their tax returns. In this article, we will explore what it means to claim an adult child as a dependent and if it is possible.
The IRS has set guidelines to determine if an individual is a dependent, regardless of their age. This term pertains to someone who depends on another person for financial support, which includes necessities like housing, healthcare, and food. The person must:
- Not file a joint tax return with someone else.
- Be a U.S. citizen, resident alien, or a resident of Canada or Mexico for part of the tax year.
- Have received less than the exemption amount for that tax year in gross taxable income.
- Receive more than half of their financial support from you.
Based on these criteria, it is possible to claim an adult child as a dependent as long as they meet the requirements mentioned above. However, some additional rules apply when claiming an adult child.
The first thing to consider is the child’s age. If the child is over the age of 19, they must be a full-time student and under the age of 24. If the child is disabled, there is no age limit to qualify as a dependent. If the child does not meet these criteria, they cannot be claimed as a dependent.
The second thing to consider is the child’s income. If the child has gross taxable income above a certain limit, they cannot be claimed as a dependent. This limit is adjusted annually and can be found on the IRS website. For 2020, the limit is $4,200.
It is important to note that claiming an adult child as a dependent may have an impact on their tax situation. If they are claimed as a dependent, they cannot claim a personal exemption for themselves on their tax return. Additionally, if they have income, it may be taxable at a higher rate as a result of being claimed as a dependent.
In conclusion, it is possible to claim an adult child as a dependent if they meet the criteria set by the IRS. However, it is important to consider their age and income when making the decision to claim them. It may be beneficial to speak with a tax professional to determine if claiming an adult child as a dependent is the best option.
Nick Charveron
Nick Charveron is a licensed tax practitioner and Partner & Co-Founder of Community Tax, LLC. As an Enrolled Agent, the highest tax credential issued by the U.S. Department of Treasury, Nick has unrestricted practice rights before the IRS. He earned his Bachelor of Science from Southern Illinois University while serving with the U.S. Army Illinois National Guard and interning at the U.S. Embassy in Warsaw, Poland. Based in Chicago, Nick combines his passion for finance and real estate with expertise in tax and accounting to help clients navigate complex financial challenges.
