Who can you claim as a dependent? It's one of the most commonly asked questions during tax season. While children may spring to mind, the IRS rules for qualifying dependents cover just about every conceivable situation, from freeloading friends to emancipated offspring. Here's how it all breaks down.
There are two types of dependents -- a qualifying child and a qualifying relative -- and each are subject to different rules. However, before determining if you can claim either type of dependent, you must first make sure the person is a U.S. citizen, U.S. national, U.S. resident or a resident of Canada or Mexico. Additionally, dependents cannot already take a personal exemption for themselves or claim another dependent on their tax form. Also note that they cannot be someone who is married and files a joint tax return.
In order to claim a child as a dependent, you need to be able to confirm the child is related to you (including foster children, adoption, stepchildren); that you provide over half of his or her financial support; that you are the only person claiming that child; and that he or she is under age 19, or if a full-time student, under age 24.
A qualifying relative does not have to live with you if he or she is a blood relative, but must not provide over half of his or her own support and cannot make over $4,000. Your child can often fit into this category if he or she is older than 19 or is a full-time student over 24, so you would still be able to take a dependent exemption for your child as long as the support and income requirements are met.
Your freeloading friend or significant other could also be considered a dependent, but must live with you the entire year and have a gross income below $4,000; you must also be the only person claiming him or her as a dependent, and you have to provide more than half of his or her yearly financial support.
Just in case you are still scratching your head, here are some of the most frequently asked questions regarding claiming dependents:
Question: My 25-year-old is living with me. He works and has made more than $4,000. Can I claim him as a dependent?
Answer: No, because your child does not meet the age test, which says your "qualifying child" must be under age 19, or 24 if he is a full-time student for a least five months out of the year, and he cannot be considered a "qualifying relative" since his income is more than $4,000.
Question: I started work in October of last year and had my baby last March. Can I claim my baby as a dependent on my taxes?
Answer: Yes, even if you have a baby on Dec. 31, you can claim your child as a dependent on your taxes.
Question: My boyfriend fully supports me. We live with his mother, but pay for our full support including rent. His mother wants to claim us as dependents. Who can claim the deduction?
Answer: As long as your boyfriend is not married (be sure to check your individual state law regarding claiming a boyfriend or girlfriend, since some states don't comply with the federal law); you don't supply over half of your support; you lived with him the entire year; and you did not earn more than $4,000 in 2015, you could qualify as his dependent. His mother could not claim you since she did not provide support.
Question: My spouse has not been able to work all year except for a month; can I claim him as a dependent?
Answer: You cannot claim a spouse as a dependent. If you are married filing jointly, you will get a personal exemption of $4,000 in 2015 for each of you.
Now that you are armed with more knowledge about dependent tax laws, you may want to reconsider letting your mother-in-law move in or kicking your freeloading friend out. They may actually help you get a larger refund!
Lisa Greene-Lewis is a certified public accountant and TurboTax tax expert. She has more than 15 years of experience in tax preparation, including positions as a public auditor, controller and operations manager. For more tax-related tips, go to blog.turbotax.intuit.com.