Claiming a child on taxes

Once you understand the IRS definition of ‘dependent,’ you can claim a child on taxes without fear

It’s one of the most confusing parts of the tax code for most people – and it’s one of the first questions on Form 1040.

Exemptions: Yourself? Spouse? Dependents?

Claiming a child on taxes can save you thousands. Each dependent you claim reduces your taxable income by $4,050,  which saves the average person in the 25% bracket more than $1,000 in taxes.

But as family structures in the U.S. continue to evolve beyond the wildest dreams of the most imaginative TV sitcom writer, there are now hundreds of questions taxpayers have about the IRS definition of “dependent.” Does a stepchild count? How about a child who doesn’t live with me, or attends college? What if the child has a part-time job and files his or her own tax return?

At JustAnswer, questions like these are routine. But even these situations can seem tame compared to some of the complicated situations the tax Experts face.

If you have questions about claiming a child on taxes, the most comprehensive information is available from the IRS in its very thorough, very long Publication 501 (2017), Exemptions, Standard Deduction, and Filing Information.

Now, even if reading the title of that publication is enough to raise your blood pressure several points, don’t panic! Publication 501 is actually fairly straightforward, even if it does take most of an afternoon to read the entire thing.

But this is the Internet age, and because the entire document is online, clicking here takes you directly to the part that explains claiming a child on taxes, or even claiming parents as dependents. You’ll find everything you need here, from a definition of “dependent” to whether or not you can claim a child that has been kidnapped.

(Yes, the IRS really is that thorough. And if the FBI believes that the kidnapper is related to the child, no, you can’t claim that child as a dependent.)
 

There’s always someone worse off than you …

As you gear up to file your taxes, it might make you feel less stressed if you realize that the IRS has already considered details as arcane as a kidnapped child. That means there’s an answer available for your more mundane questions.

In that spirit, take a look at some of the interesting questions – and answers – that are found on JustAnswer. You might even find the answer to your own question here, because someone else came along and asked it first!

• She’s whispering in his ear …

My daughter’s father is dating a lawyer and I feel he’s backing me into a corner telling me he has the right to claim her on his taxes, not me.

I’ve had my daughter as my dependent and claimed her every year. She started college in July. Her father is paying for her college tuition and room and board. Will I still be able to claim her since I supported her half the year (and still continue to assist with food etc.)? What if we both claim her? 

Mark Taylor, Certified Public Accountant (CPA):

The rules for claiming a qualifying child as a dependent are as follows: Relationship (you would clearly meet this requirement). Provided a residence for more than 1/2 the year, except for temporary absences (you would meet this requirement as well). Age – must be under 19 or under 24 and a full time student (you will meet this requirement too), and the child did not provide more than 1/2 of their support (you meet this requirement too).

Based on the requirements you would be entitled to claim your daughter for this year. And the IRS will side with the custodial parent.

What happens if both divorced parents claim a child as an exemption?

I want to claim my child. The child has spent 1/2 time with both parents and I currently have a custody modification for sole custody of the child. I want to ensure there are no tax issues if I claim the child.

Chad EA, CFP ®:

If someone else claimed your dependent child inappropriately, and if they file first, your return will be rejected if e-filed. You would then need to file a return on paper, claiming the child as appropriate. The IRS will process your return and send you your refund.

Shortly (up to a year) thereafter, you’ll receive a letter from the IRS, stating that your child was claimed on another return. It will tell you to file an amended return if you made a mistake, and if you didn’t make a mistake, do nothing. The other party will get the same letter you did. If one of you doesn’t file an amended return, unclaiming the child, the next letter, from the IRS, will require you to provide proof. Be sure to reply in a timely manner.

What happens if I claim the children for whom I pay child support even if they live with my ex-wife and her husband, who also want to claim them?

Lane, JD, CFP, MBA, CRPS:

Real world, the way the systems works, is the first person to claim will get the dependency deduction and associated benefits.

When (if) a second taxpayer takes a dependency for the same child (same Social Security number) they will be rejected.

Then both taxpayers will be audited, and IRS will make the determination based on the dependency rules.

I’m going to claim my child as a dependent, but my ex-wife wants to claim him under the Earned Income Credit.

Seems as though the government would flag two benefits/deduction coming from one child.

Stephen G., Senior Financial Expert

There’s no problem with one child being the basis of multiple benefits. The only problem comes in if the same benefit is claimed on both returns. You claim the dependency deduction and she is able to use the your son as a qualifying child to claim the Earned Income Credit only. The law and regulations provide for this.

Can I claim my sister as a dependent?

She lives with me, is permanently disabled and receives SSDI. I provide all the rent, food, transportation and care for her.

Robin D., Senior Tax Advisor 4:

Yes, you could claim her as a Qualified Relative as long as you pay more for her support than she pays herself with her SSDI. 

Who claims the child on taxes with joint custody?

My ex won’t agree to anything and the divorce isn’t final yet. We have 50/50 custody shared time. I make more than he does.

Chad EA, CFP ®:

If you and your spouse, or soon-to-be ex -spouse can’t agree on who claims the child as a qualifying child, and more than one person claims tax benefits using the same child, the IRS has created “tiebreaker rules” which are explained below.

Under the Tiebreaker Rule, the child is treated as a qualifying child only by:

• The parent with whom the child lived the longest during the tax year, if two of the persons are the child’s parents and they do not file a joint return together
   
• The parent with the highest adjusted gross income (AGI) if the child lived with each parent for the same amount of time during the tax years, and they do not file a joint return together

Am I allowed to claim my Canadian girlfriend as a dependent on my taxes?

My girlfriend is a Canadian citizen. She is in the U.S. on an F-1 visa attending university, and made $998 at her part-time work-study job on campus. I support her financially, including food, lodging, cell phone, gasoline, entertainment expenses, textbooks and her first semester of college. 

Lev, Tax Advisor:

Tests to be a qualifying relative:

• The person can’t be your qualifying child or the qualifying child of any other taxpayer. 
   
• The person either (a) must be related to you or (b) must live with you all year as a member of your household (and your relationship must not violate local law).
   
• The person’s gross income for the year must be less than $4,050.
   
• You must provide more than half of the person’s total support for the year.

So far there are no issues. As she is on an F1 visa, she is considered a nonresident alien, and a resident of Canada. However, based on special agreements, residents of Canada and Mexico may be claimed as dependents.

Clearly, there are almost as many different situations for claiming a child on taxes as there are taxpayers in the U.S. But remember, the IRS has thought of everything. Did you know that if you have a marriage annulled, you can file for a refund on taxes paid at the higher married rate for all the years covered by the annulment?

Of course, that’s a different subject entirely from claiming a child on taxes. If your situation isn’t covered here, and you want guidance for filing your taxes, turn to the IRS or, for a customized answer, to the Tax Experts on JustAnswer.

Have you ever had to file taxes with an unusual dependent situation? Please share your experiences with us in the comments below!