Claiming Dependents On Taxes

Article summary: A tax dependent is a qualifying child (or relative) that you can claim for tax deductions and credits on your tax return. There is a separate set of qualifying criteria for a child, relative, or anyone else that you want to claim for tax purposes in order to be considered “qualifying”. Examples of people that cannot be claimed as dependents are married people filing a joint return (generally), non-U.S. citizens or residents, foreign exchange students, and employees from your business. Claiming a dependent makes you qualify for big tax breaks and more favorable tax rates. There are also several credits you can apply for, such as the EITC. Even if you are claimed by someone else as a dependent, you are still required to file a tax return of your own if you earned income above a certain threshold.

What Are Dependents?

For tax purposes, a dependent is anyone who relies on you for financial support and can be “claimed” on your tax return (other than your spouse, of course.) Typical examples of dependents are your children and older relatives, but it can include people who aren’t a direct family member, such as an unmarried domestic partner. By claiming a dependent on your tax return, you are declaring to the IRS that you’re familiar with their guidelines about dependents and that you have done your homework making sure they qualify.

Who Qualifies As A Dependent?

The following are the rules outlined by the IRS for a person to qualify as a dependent. These rules generally apply to all dependents:

• Must be a U.S. citizen or U.S. national, a resident alien, or has to reside in Mexico or Canada at least.
• They cannot be claimed as a dependent on another person’s tax return.
• Spouses cannot claim each other as dependents if they file their taxes jointly.
• It goes without saying, but a dependent cannot themselves claim a dependent on their own tax return.
• Any potential dependent must be a qualifying child or qualifying relative, which means meeting all the relevant criteria which we describe in the section below.

Types of Qualified Dependents

The IRS contemplates two types of dependents you can claim on your tax return and has specific rules for each of them. Let’s go over them:

Criteria For A Qualifying Child

Qualifying children are the most common type of tax dependents, but being a child is not synonymous with being a qualifying child for the IRS. The child in question must pass the following tests if you want to claim them as dependents on your tax return.

• Age Test: The child must be under age 19. If they are a full time student, the age limit extends up to 24, or any age if they are permanently or totally disabled.
• Residency Test: With some exceptions, the child must live in your residence for over half the year.
• Relationship Test: The child must be your son, daughter, an eligible foster child, brother or half-brother or stepbrother, sister or half-sister or stepsister, adopted child, or a descendant of any of these.
• Support Test: Get more than half of their financial support from you. It should be noted that there is a very similar test for qualifying adults, but this test specifically asks if the child would not be able to provide part of their own support.
• Joint Return Test: The child must not have filed their own tax report jointly with their spouse (unless to claim a refund on taxes paid or withheld.

 

Tie-Breaker Rule For A Qualifying Child Of More Than One Person

If you are in a situation where you and another taxpayer (including your spouse if filing separately) have grounds to claim the same qualifying child, but cannot agree on who gets to keep the claim, the IRS can step in and use the following tie-breaker rule to deny one claim (or, in some cases, both).

• The IRS will give preference to the parent of the child if only one taxpayer is the child’s parent.
• In case that both taxpayers are parents to the child, the preference will be given to the one who has lived with the child for a longer period of time.
• If the child has lived with each or both parents for the same period of time, then preference will be given to the parent who earns the higher income.
• In a similar manner, if neither of the taxpayers is the parent, the IRS will treat the child as the qualifying child of whoever has the highest Adjusted Gross Income (AGI).

Criteria For A Qualifying Relative

It’s not only children that qualify under IRS guidelines to be tax dependents. Adult relatives can also be claimed as tax dependents, but they must meet additional criteria on top of the general rules we described in the previous section. 

• Gross income test: The dependent is technically allowed to have some income of their own, but it cannot be above a certain amount. For 2024 the limit is $5,050.

• Relationship test and member of household test: These tests are related, but different. The former states that, in order for the relative to qualify, they must be a child or descendant of a child, sibling or step siblings, parent or step parent, ancestor of a parent, uncle or aunt, or a father- or mother-in-law; the latter states that any person can be qualifying if they live with the taxpayer for the entire year, even if not directly related to them.
• Qualifying child test: For a relative to qualify as a tax dependent, they must not be a qualifying child for anyone else, meaning that the individual you are trying to claim as a dependent must not meet the criteria to be a qualifying child to anybody else or to yourself.
• Support test: You, the taxpayer, must have provided more than half of the person’s support during the year. While this sounds the same as the qualifying child support test, there’s a key difference: This test is asking whether you provided over half the support for the relative, while the qualifying child test asks whether the child themselves provided half or less of their own support.

Who Does Not Qualify As A Tax Dependent?

The IRS will not accept the following people if you try to claim them as dependents on your tax return.

• Technically, you cannot claim anyone as a dependent if you yourself have been claimed as a dependent by someone else that year.
• Any person who is not a U.S. citizen, a U.S. resident alien, or a resident of Mexico or Canada.
• Any person who works for you (i.e. an employee.)
• Foreign exchange students.
• Finally, a married person who files a joint tax return does not qualify as a dependent (although there are some complicated exceptions outlined by the IRS in Publication 501 that play a role in this.)

Why Claim Someone As A Dependent On Your Tax Return?

When done right, claiming dependents can potentially save you thousands of dollars thanks to some valuable credits and deductions. In other words, claiming a dependent can net you some big tax breaks, so getting familiar with the hows, whys and whos of claiming dependents is vital.

Benefits Of Claiming Dependents

The following is a list of the tax benefits you could be entitled to if a child or relative in your household is qualified under IRS to become a tax dependent. Make sure to carefully go over the requirements outlined by the IRS and even consult a tax professional so that you can take advantage of these credits while still reporting your taxes accurately.

Child Tax Credit (CTC)

As the name implies, the CTC is a tax benefit for people who claim qualifying children as dependents. For 2025, the maximum amount per qualifying child is $2,000 when your modified adjusted gross income is $200,000 or less (or $400,000 if you’re filing a joint return), and the refundable portion of the credit is $1,700 (AKA the additional child tax credit).

This is one of the simplest credits to qualify for, as the dependent just has to be under the age of 17 at the end of the tax year.

Earned Income Tax Credit (EITC)

The earned income tax credit (EITC) is a tax break made and available for workers with low-to-moderate wages. The credit grows larger the more dependents you have (up to a certain amount) and reduces the amount of taxes owed on a dollar-for-dollar basis. On top of that, if the tax credits exceed the tax liability of the people who qualify for the ETIC, they are also eligible to be refunded on the taxes that have already been deducted from their paychecks.

Eligibility for the EITC is a little more complex than the other ones; the child must meet four independent criteria (called “basic dependent tests” by the IRS): residency, age, relationship, and joint return. Be advised that, even if the child is a legal U.S. resident, they must also have lived with you for over six months.

Child And Dependent Care Credit

If you pay out-of-pocket expenses for either child care or care for a disabled dependent, then you can benefit from this tax credit. The child and dependent care credit (CDCC) is offered to taxpayers who paid for someone to take care of your child or a disabled dependent so you can work (or look for work). By claiming this credit, you would reduce your income tax on your tax return.

To be eligible for the CDCC you must have earned at least some income through the tax year, and used a portion of that income to pay for the care expenses of your dependent so that you could either work or find a job. This credit depends on your adjusted gross income (AGI) to determine how much you can deduct off of your qualifying expenses.

For your dependent to qualify, they must be under 13 years of age (unless they are permanently disabled). In case of divorced parents, only the parent with custody of the child is eligible for the CDCC, even if the noncustodial parent claims the child as a dependent in their own tax return.

You can claim from 20% to 35% of the qualifying care expenses up to a maximum of $3,000 for one dependent, and $6,000 for two or more dependents (in 2024). While this credito option might be tempting for the people who qualify for it, there exist alternatives that might save you more money on taxes in the long run, such as using a Flexible Spending Account through your employer.

Adoption Credit

The adoption credit covers some of the adoption costs of children you adopted during that year. For 2024, the credit covers up to $16,810 per child for people with an AGI of $292,150 or less; also, people who adopt children with special or functional needs can get the full credit amount even if their expenses were less. The caveat is that people adopting their spouses’ children do not qualify for this credit.

Head Of Household Filing Status Benefits

There are significant tax savings to be had when you use the “head of household” filing status. But you have to remember, this filing is not just about being the person with the highest income in your household or being the “breadwinner”; the IRS says that you must be unmarried and live with a dependent (whom you have supported for more than a year) while paying over 50% of the household expenses in order to qualify.

If you do qualify as a head of household, the benefits are significant. For starters, you will receive a more favorable tax rate than as a single taxpayer, and can claim a higher standard reduction when filing your taxes (in the ballpark of a married couple filing jointly, although not quite as high). You cannot, however, file as a head of household if you are married, even if you file separately; you must be either single or already in a stage of separation from your spouse.

As you can see, credits are more useful in reducing your tax bill because they subtract from your taxable income dollar-for-dollar instead of a lump sum. Still, it’s important to apply for any credit and deduction you qualify for if you want to file an accurate tax report each season.

What If You Are Someone Else’s Tax Dependent?

Even if another taxpayer has claimed you as a dependent, you can still be required to file your own tax return, depending on your income, marital status and a couple of other qualifying details. Filing as someone else’s dependent can help you in the end by getting refunded on any income tax that an employer held back for tax purposes, and you might even be able to claim a few refundable tax credits such as the American Opportunity Tax Credit or the Child Tax Credit.

FAQ: Claiming Dependents On Taxes

1. Who qualifies as a dependent for tax purposes?

A dependent is generally a child or relative (or unrelated adult in some cases) who meets the qualifying criteria of the IRS on age, residency, and income. They must rely on your income for partial or total financial support.

2. My child has a job, can I still claim them as a dependent?

Yes, as long as the child meets the qualifying criteria of the IRS and their income does not cover more than half of their own financial support, you can claim them in your tax return.

3. What are the tax benefits of claiming a dependent?

Yes, in order for you to claim a child or relative as a dependent, they need an SSN if they are U.S. citizens, or an ITIN for qualifying non-U.S. citizens.

4. Can both parents claim the same child as their dependent?

No, the child can only be a qualifying child for one parent in any given tax year, and there exists tie breaking rules in case two taxpayers try to claim the same child. Still, there is no rule stating that the child has to be claimed by the same parent the following year. In case of divorced parents, an agreement has to be reached through Form 8332.

5. Can non-relatives be claimed as dependents?

Yes, provided that the non-relative lived with you all year, earned an income of less than $4,700 (for 2024), and you provided over half of their financial support. Even then, this does not apply to all cases, so it is recommended that you go over your case with a tax professional.

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