Claiming Dependents on Your US Tax Return

Written by: Josh Katz, CPA

A dependent is a person who relies on someone else for financial support or care. This can include children, elderly parents, disabled relatives, or other family members. The term dependent can also refer to someone financially supported by someone else, such as a partner or spouse.

In the context of taxes, a dependent is a person who meets specific criteria set by the Internal Revenue Service and can be claimed by someone as a dependent on their tax return, which may entitle the taxpayer to certain tax benefits.

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Who qualifies to be claimed as a dependent?

To claim someone as a dependent on your US tax return, they must meet specific criteria. These include being a US citizen, US resident alien, US national, or resident of Canada or Mexico, and having a valid SSN or ITIN. Additionally, the person must either be your qualifying child or a qualifying relative.

To be considered a qualifying child, the person must meet the following criteria:

  • The child must be your son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, half-brother, half-sister, or a descendant of any of them.
  • The child must be under 19 years old or 24 if a full-time student.
  • The child must have lived with you for over half the year.
  • The child must not have provided more than half of their own support during the year.
  • The child must not have filed a joint tax return (unless only to claim a refund) with their spouse.

If the person fails to meet the qualifying child criteria, they may still be able to qualify as a dependent under the category of a qualifying relative. To be classified as a qualifying relative, the individual needs to satisfy the following criteria: 

  • The person must not be your qualifying child or the qualifying child of any other tax filer.
  • The person must have lived with you for the entire year or be related to you in one of the ways listed by the IRS.
  • The person must have earned less than $4,300 in a year.
  • You must provide more than half of their support during the year.
  • The person must not have filed a joint tax return (unless only to claim a refund) with their spouse.

What are the benefits of claiming a dependent on your US tax return?

Claiming a dependent on your tax return can increase applicable credits to your tax return, resulting in a lower tax liability. Below are some specific benefits of claiming a dependent on your tax return.

  • Higher standard deduction: By claiming a dependent, you may be able to file as Head of Household and receive a higher standard deduction, thereby reducing your taxable income and lowering your tax liability.

  • Child tax credit: If your dependent is a qualifying child under 17, you may be eligible for a child tax credit, which can provide a credit of up to $2,000 per child to help reduce your tax liability. Additionally, you may qualify for the Additional Child Tax Credit, a refundable credit that can provide a refund of up to $1,400 per child if you meet specific requirements.

  • Dependent care credit: If you have qualifying dependent children or other dependents who require care while you work, you may be eligible for a dependent care credit, which can help cover the cost of childcare or other care expenses. This credit can help to reduce your overall tax liability.
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Need help with your US taxes?

In short, by claiming dependents on your tax return, you can save significant money on your taxes and retain more of your income. However, it’s crucial to carefully review the guidelines set forth by the IRS and seek advice from a tax professional to ensure that you can accurately claim your dependents and make the most of all possible tax benefits.

If you need help claiming dependents on your US tax return, please contact us at info@universaltaxprofessionals.com.