Your Tax Question - 078

Dear John, I was wondering if there is an age limit for claiming my child on my taxes.  Thank you, Jennifer
---
Hi Jennifer,


Yes, Your child must be under age 19 (or under age 24 if a full-time student).  However, you may still be able to claim your child as a dependent relative as long as he/she meets some other IRS criteria as well.


Thanks,
John


PS.  Shoot me an email and I will be happy to help you with the Dependent Exemption tests.

Your Tax Question - 047(c)

(This segment is a continuation from Your Tax Question – 047(b) which explores the question about filing as Head of Household.)

Who is a Qualifying Relative?

A Qualifying Relative who qualifies must meet five tests as well and does not meet the Qualifying Child tests.

1. Gross Income Test
a. Must be LESS than the dependency exemption amount
i. $3,650 for 2010

2. Support Test
a. The taxpayer must provide more than ½ of the dependent’s support for the year
b. Special notice for Multiple Support situations

3. Relationship, or Member of Household, Test (either)
a. Varied levels of blood relationships
i. Death and divorces not a factor
b. Must be a member of the household all year

4. Citizen or Residency Test
a. U.S., Canada, Mexico
b. OR Legally adopted child but alien resident

5. Joint Return Test
a. Married individuals are not allowed to file as such for this exemption
i. Special joint return test allowance for couples not required to file a return

These are the 5 tests that individuals must meet in order to be considered your Qualified Relative.

There is one other situation that may cause you to be able to file as Head of Household. If your parent lives in his or her own home but you financially maintain that home then you are able to file as Head of Household.

According to your original question, Bart, I would agree that your son does indeed qualify as your Qualified Child but I do question your ability to claim your sister and brother-in-law as your dependents because the facts that you have given do not convince me that they will meet the Qualified Relative Test. To determine this I would need you to get ahold of me with more information.

I really hope this helps.
John

PS. Were you aware that I am accepting first time clients for the 2010 tax year filing season at just $69.00 per client? That’s unheard of but true. They say that you get what you pay for but I am willing to be that in this case you will get a whole bunch more.

Your Tax Question - 047(b)

(This segment is a continuation from Your Tax Question – 047(a) which explores the question about filing as Head of Household.)

Who is a Qualified Child?

A child who qualifies must meet fives tests.

1. Age Test (any of the three criteria to qualify)
a. Under age of 19 at the end of the year
b. Full-time student under the age of 24 at the end of the year
c. Must be permanently and totally disabled

2. Non-Support Test (must NOT have)
a. Must not have provided more than ½ of their own support (Scholarships not counted)

3. Relationship Test (must be the taxpayer’s)
a. Son
b. Daughter
c. Step-son
d. Step-daughter
e. Eligible foster child
f. Brother
g. Sister
h. Step-Brother
i. Step-Sister
j. Or decedent of any or the above

4. Principal Residence Test
a. Must live with the taxpayer more than ½ the year
i. Temp absence such as illnesses, vacation, education, military service, or other

extenuating circumstances notwithstanding.

5. Citizen or Residency Test
a. Must be a resident of the U.S., Canada, or Mexico

This is the 5 tests that a person must meet in order to be a Qualifying Child. In the next post I will explain who qualifies as a Qualifying Relative of a taxpayer which also a consideration in the Head of Household filing status. To read about the Resident Test, click the following link Your Tax Question – 047(c).

Your Tax Question - 047(a)

Dear John, I am a single man and one of my sons has come to live with me this year. Last year I filed my taxes as Single but I have been told that I can file as Head of Household this year because he is with me. Plus, my sister and husband are living with me this year due to the downturn in the economy and I have heard that they will be considered my dependents for the year on my tax return. Is this true? Thanks in advance, Bart
---
Hi Bart,

Thanks for the question. It seems (off the top of my head) that everything you have been told is correct, but to make sure let’s run through the rules and make sure.

First, the conditions for the Head of Household filing status are as follows.

To file this way the taxpayer must:

1. maintain a home which is the primary residency
a. of a qualifying child(ren) or
b. other qualified dependent(s)

2. OR maintained a separate home for a parent

The conditions for the Head of Household filing status are straight forward but figuring out who is and is not a qualifying child or dependent is an altogether different matter. I will add these details in following posts so as to not overwhelm this one blog post. Click the following link in order to read Your Tax Question – 047(b), this next post explains the rules for who qualifies as a child.