Who Is My Dependent?
You might believe a "dependent" is a minor child who lives with you. While that is essentially
correct, dependents can include parents, other relatives and non-relatives, and even children who
don't live with you. Here's an overview of the dependency exemption.
Exemptions and your taxable income. Each dependent deduction is worth $4,000 on your 2015
federal income tax return, and reduces your taxable income by this amount. You'll lose part of
the benefit when your adjusted gross income reaches a certain level. For 2015, the phase-out
begins at $309,900 when you're married filing jointly and $258,250 when you're single.
Definition of a dependent. A dependent is a qualifying child or a qualifying relative. While
there are specific rules, very broadly speaking, a dependent is someone who lives with you and
who meets several tests, including the support test. For qualifying children, the support test
means the child cannot have provided more than half of his or her own support for the year. For
qualifying relatives, the support test means you generally must provide more than half of that
person's total support during the year. There are many exceptions. For example, parents don't
have to live with you if they otherwise qualify, but certain other relatives do. If you're divorced
and a noncustodial parent, your child doesn't necessarily have to live with you for the dependent
deduction to apply.
Who can't be claimed? Your spouse is never your dependent. In addition, you generally may
not claim a married person as a dependent if that person files a joint return with a spouse. Also, a
dependent must be a U.S. citizen, resident alien, national, or a resident of Canada or Mexico for
part of the year.
For a seemingly simple deduction, claiming an exemption for a dependent can be quite complex.
You'll want to get it right, because being able to claim someone as a dependent can lead to other
tax benefits, including the child tax credit, education credits, and the dependent care credit.
Contact JAG CPA LLC to learn who qualifies as your dependent. We'll help you make the most of
your federal income tax exemptions.
