What is a dependent in tax

While every American who earns an income has to pay taxes, many taxpayers can reduce how much they owe by claiming what are called personal allowances. Personal allowances include

What is a dependent in tax

While every American who earns an income has to pay taxes, many taxpayers can reduce how much they owe by claiming what are called personal allowances. Personal allowances include deductions, exemptions, and credits.

For 2021 and 2022, there are several credits you can claim for having a dependent as well as certain deductions that may also apply. A dependent is often your minor child or an elderly or sick relative who lived in your house throughout the year.

But several different types of people can be claimed as a dependent as long as you are responsible for providing their care. Several tests created and issued by the Internal Revenue Service (IRS) will determine whether someone qualifies as your dependent.

If you can claim someone as a dependent, certain deductions you can get will lower the amount of income you can be taxed on. If you qualify for a tax credit related to having a dependent, your tax liability will shrink and you may even be able to redeem the credit for a tax refund.

What is a dependent?

A dependent is a person whose care and income were largely provided by a taxpayer during the year. For the purpose of paying taxes and filing tax returns, being able to claim a dependent means you can access certain deductions and credits, which can ultimately lower your tax burden.

Until the passage of the Tax Cuts and Jobs Act in December 2017, you could claim an exemption for having dependents that would further reduce the part of your income on which you can be taxed. This personal exemption has been removed; in its place, the IRS now offers increased credits for claiming dependents.

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Each dependent must be a qualifying relative according to a rubric of tests created by the IRS, which well discuss in the next section. But qualifying relative can be a broad measure. Foster children and in-laws are eligible, as is your girlfriend or boyfriend in certain circumstances.

Having certain kinds of dependents qualifies you for head of household status, which usually results in lower tax rates than if you had single-filer or married-filing-separately status. (Read more about how to determine your filing status.)

As long as you qualify, you yourself can be claimed as a dependent, even if you paid your own taxes and filed a tax return. But dependents cant claim someone else as a dependent. If you and your spouse file joint tax returns, and one of you can be claimed as a dependent, neither of you can claim any dependents.

You can claim dependents on Form W-4 when you authorize your employer to withhold taxes from your paycheck. But if you didnt claim them for the purpose of withholding, then you can claim the dependents on your tax return when you file for that year, which may make you eligible for a refund.

Read more about how to file your taxes.

Whom can I claim as a dependent?

You can only claim a dependent who satisfies the IRSs guidelines for qualification. This section will go into those tests and explain who qualifies and who doesnt.

But this is only the first step. After determining whom you can claim as a dependent, another series of tests must be applied to determine what credits and deductions youre eligible for because of the dependent.

Claiming a qualifying child as a dependent

There are potentially higher tax credits for claiming a dependent child than there are for claiming other types of dependents, such as an elderly parent.

The dependent child must satisfy the IRSs following tests:

  • Relationship: They were your son, daughter, stepchild, foster child, brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant of any of them.
  • Age: They were under age 19 at the end of the year and younger than you (or your spouse if filing jointly); or under age 24 at the end of the year, a student, and younger than you (or your spouse if filing jointly); or any age if permanently and totally disabled.
  • Residence: They must have lived with you for more than half of the year, with exceptions for temporary absences (including kidnapping), children of parents who live separately, or children who were born or died during the year.
  • Support: You must have provided more than half of the childs support during the year.
  • Childs filing status: If the child earned any income that year, he or she has to file tax return. You cant claim a child as a dependent if he or she is married and files a joint return unless theyre claiming a tax refund.

Claiming a qualifying relative as a dependent

Qualifying dependent relatives include anyone who satisfies a separate set of guidelines from the IRS.

Note that the key difference between this type of dependent and the qualifying child dependent is that this dependent may not have to have lived with you most of the year. For example, a child can be a qualifying relative to you, even if theyre not a qualifying child, if he or she lives apart from you.

The IRSs guidelines for qualification are as follows:

  • Relationship: Neither you nor anyone else is claiming him or her as a qualifying child dependent.
  • Income: They earned a gross income of less than $4,300, for tax year 2021, which you'll report on your 2022 tax returns. (For tax year 2022, the dependent income limit to qualify will increase to $4,400.) There are some exceptions for dependents who have a disability.
  • Support: You must have provided more than half of their support during the year, unless you have a multiple-support agreement for the dependent with another person, or the dependent is a child of divorced or separated parents, or is a victim of kidnapping.
  • Filing status: If he or she is married and files jointly, you cant claim him or her as a dependent.
  • Legality: Your relationship to the dependent doesnt violate local law.

Additionally, the dependent must have lived with you for the entire year (with some exceptions) unless he or she falls into one of the following categories, which are considered relatives who dont have to live with you while receiving your support:

  • Your child, stepchild, foster child, or grandchild, including adopted children;
  • Your sibling, including half siblings and stepsiblings;
  • Your parent, including step parents but not foster parents;
  • You grandparent or other direct ancestor (like a great-grandparent);
  • Your niece or nephew, including those of your half siblings;
  • Your aunt or uncle;
  • Your in-laws.

Head-of-household status

Taxpayers who are eligible to file as head of household often pay lower taxes. They receive lower marginal tax rates than people with single-filer status, their non-head-of-household equivalent.

Heads of household also receive a higher standard deduction. The standard deduction is the minimum amount of income you cant be taxed on  the higher the standard deduction, the less taxes youll owe. As of 2021, individuals have a $12,550 standard deduction, while heads of household have an $18,880 standard deduction.

To qualify for head-of-household status, you need to be unmarried (including legal separation) and pay at least 51% of the cost of household upkeep. In addition, a qualifying person must have lived with you for at least 183 days of the year, with exceptions for temporary absences (like school) and dependent parents, who dont have to live with you.

Qualifying persons must be either a qualifying child or a qualifying relative as described earlier in this section. But if they dont satisfy the following tests, then you cant claim them as a qualifying person for the purpose of filing as head of household.

  • The person is a qualifying child and single.
  • The person is a qualifying child and married, but you can claim them as a dependent.
  • The person is your mother or father and considered a qualifying relative, and can be claimed as your dependent.
  • The person is a qualifying relative but not your mother or father and can be claimed as your dependent (but not if a multiple-support agreement is in place for this person). This person must be one of the relatives that doesnt necessarily have to live with you, as defined above, but did live with you for at least half the year.

Can I claim my boyfriend or girlfriend as a dependent?

You can't claim a spouse as a dependent but in many cases, you can claim your partner as a dependent if they live with you for the entire year, they earned less than $4,300 that year, and you provided at least half of their financial support. This is an advantageous scenario when one partner works while the other goes to school, or if one partner is unemployed.

Basically, your boyfriend or girlfriend does count as a qualifying relative, and if you claim him or her then youre eligible for certain deductions and credits just like if he or she were legally related to you.

However, you cant claim your girlfriend or boyfriend as a qualifying person for the purpose of filing as head of household. Thats because he or she doesnt meet the relatives who dont have to live with you test defined above, which applies only to people related to you by blood, marriage, or law.

Tax credits for claiming a dependent

The entire reason youd want to claim a dependent is to pay lower taxes. Having a dependent makes you eligible for more personal allowances, which generally comprise the deductions, credits, and exemptions you can receive.

A tax credit reduces the amount of taxes you owe; if you owe $10,000 in taxes but receive a credit for $1,000, then you only owe $9,000. Most benefits from claiming a dependent are due to credits you can claim.

The following credits may apply when you claim a dependent:

Child tax credit (CTC)

A credit for up to $2,000 per qualifying child. The CTC may be reduced if you file as an individual and earn an adjusted gross income of $200,000 or more, or if youre married, filing jointly, and earn a combined $400,000 or more. For your 2021 taxes, you may qualify for an increased child tax credit of $3,600 thanks to the COVID-19 relief measures pass in the American Rescue Plan.

Additional child tax credit (ACTC)

If part of the CTC reduces your tax liability to $0, the remaining part of the credit can be refunded to you up to $1,400 per qualifying child. The same income limits apply.

Other dependent credit (ODC)

Credit up to $500 per other qualifying dependent. The ODC is nonrefundable, meaning that if part of it reduces your tax burden to $0, then you dont get the remaining part refunded.

Earned income tax credit (EITC)

If you earn under a certain amount of money, you can claim the EITC. The amount of the EITC increases the more children you have. The numbers below reflect the IRS's rules for claiming the EITC, for tax year 2021.

2021 EITC income limits and maximum credit0$1,502$21,430$27,3801$3,618$42,158$48,1082$5,980$47,915$53,8653 or more$6,728$51,464$57,414

Additionally, no taxpayer can claim the EITC if he or she makes more than $10,000 in investment income in tax year 2021. (Up from the 2019 threshold of $3,600. The threshold was increased as part of COVID-19 relief measures passed by Congress.)

Child and dependent care credit

A tax credit for people who cared for one or more qualifying dependents while incurring work-related expenses, including looking for work. The credit is worth up to $3,000 for one qualifying dependent and up to $6,000 for two or more qualifying dependents.

The child and dependent care credit has stricter qualification guidelines than the child tax credit. For one, the qualifying dependent must either be a qualifying child age 13 or younger, or an individual who is physically or mentally unable to care for him or herself.

Tax deductions for claiming a dependent

A deduction means less of your income can be taxed. If you make $100,000 per year and receive a deduction of $20,000, then you can only be taxed on $80,000. Thats your taxable income.

Most taxpayers will take the standard deduction. As of 2021, the standard deduction is $12,550 for filing status single or married filing separately, $18,800 for head of household, and $25,100 for married filing jointly or qualifying widower.

If you itemize your deductions  meaning that you add up all the deductions youre eligible for  and find that the standard deduction is still higher, then you take the standard deduction.

There are dozens of deductions you can claim, but most arent related to having dependents. However, so of them are, including:

  • Medical and dental expenses deduction: If you and your dependents medical expenses exceed 7.5% of your adjusted gross income, then you can deduct those expenses. (Learn more about the medical expense deduction.)
  • Student loan interest deduction: If you pay your dependents student loan bills, then you can deduct the interest. (Learn more about deducting student loan interest.)

Tax exemptions for claiming a dependent

Exemptions function like deductions: they lower your taxable income. However, exemptions were suspended by the Tax Cuts and Jobs Act of 2017. You cant claim any exemptions on your taxes for any tax years between 2018 and 2025.

But if youre filing a tax return for prior years, you can still claim an exemption. There is the personal exemption, of which you can claim one for yourself and one for your spouse; as well as the dependent exemption, which you can claim for each qualifying child and qualifying relative. See previous sections for how such dependents are defined.

For tax years 2017 and previous, you could claim an unlimited number of exemptions. Each exemption is worth the same amount; each exemption allowed you to deduct $4,050 from your taxable income.

These exemptions stacked up, too; in 2017, if you and your spouse each claimed a personal exemption, and you also claimed a dependent exemption for one child, then your total exemptions would have been $12,150.

Thats in addition to the standard deduction, which in 2017 was $6,350 for individuals, $9,350 for heads of household, and $12,700 for married taxpayers filing jointly and qualifying widowers.

For prior-year tax returns, you may be eligible to claim the child tax credit and the dependent exemption for each qualifying child, as well as the personal exemption, as long as you earn below the income threshold for your filing status. This would considerably reduce your taxable income for that year.

Exemption amounts by year2025$02024$02023$02022$02021$02020$02019$02018$02017$4,0502016$4,0502015$4,0002014$3,9502013$3,9002012$3,8002011$3,7002010$3,6502009$3,6502008$3,5002007$3,4002006$3,3002005$3,2002004$3,1002003$3,0502002$3,0002001$2,9002000$2,8001999 or earlierCheck with the IRS

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