Dependents - Qualifying Child & Qualifying Relative

A dependent can fall into ONE of TWO categories:

1. Qualifying Child

2. Qualifying Relative

To be a qualifying child, the child MUST meet the following SIX requirements:

1. Relationship

The child MUST be your:

• Son,

• Daughter,

• Stepchild,

• Foster Child*,

• Adopted Child** (this child is treated as either son or daughter),

• Brother (including half-brother),

• Sister (including half-sister),

• Stepbrother,

• Stepsister, or

• A descendant of any of them (examples: grandchild, niece, or nephew).

*A "foster child" is any child who is placed with you by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction.

**An adopted child includes a child lawfully placed with you for legal adoption even if the adoption is NOT final. This child is considered to be a blood relative.

2. Age

*The child does NOT need to be younger than you IF the child is permanently and totally disabled.***

**A STUDENT is a child enrolled full-time during any part of any 5 calendar months during the tax year at a school or has taken a full-time on-farm training course given by a school, county, or local government agency. A school includes a technical, trade, or mechanical school. It does NOT include an on-the-job training course, correspondence school, night school, Internet school (if the Internet school provides online classes only).

***A person is PERMANENTLY AND TOTALLY DISABLED if at any time during the tax year the person was unable to engage in any substantial gainful activity because of a physical or mental condition and a doctor has determined that this condition has lasted or can be expected to last continuously for AT LEAST 12 months, OR can lead to death.

3. Residency

The child MUST live with you for more than half of the tax year (AT LEAST 183 nights or AT LEAST 184 nights if a leap year - These nights do NOT need to be consecutive).

Certain EXCEPTIONS Apply to the Residency Requirement

Kidnapped Child - If the child is presumed by law enforcement authorities to have been kidnapped by someone who is not a member of your family or of the child's family, and the child shared the same principal place of residence as you for more than half of the portion of the tax year preceding the kidnapping, the child satisfies the residency requirement for you for all tax years ending during the period in which the child is missing. A missing child ceases to satisfy the residency requirement in the first tax year beginning after the calendar year in which the child is determined to be dead or, if earlier, in which the child would have attained the age of 18.

Children of Divorced or Separated Parents (including parents who were never married) - A child will be treated as the NONCUSTODIAL parent's "qualifying child" if ALL of the following apply:

• The parents are divorced, legally separated, separated under a written agreement, or lived apart at ALL times during the LAST 6 months of tax year whether or not they are or were married (calendar year from July 1 to December 31),

• The child received OVER 50% of his or her support for the tax year from the parents,

• The child is in the custody of one or both of the parents for more than half the tax year (AT LEAST 183 nights or AT LEAST 184 nights if a leap year - These nights do NOT need to be consecutive), AND

• At least ONE of the following applies:

1. The custodial parent will sign an unconditional written declaration (usually IRS Form 8332) that he or she will NOT claim the child as a dependent for the tax year and the noncustodial parent attaches this declaration to their tax return, OR

2. If divorced or separated BETWEEN January 1, 1985 and December 31, 2008, the noncustodial parent attaches certain pages from the divorce decree or separation agreement to their tax return, OR

3. A divorce or separation agreement went into effect BEFORE 1985 and applies to the current tax year and states that the noncustodial parent can claim the child as a dependent as long as the noncustodial parent provides at least $600 for the child's support during the tax year.

NOTE: The CUSTODIAL parent is the parent with whom the child resides for the GREATER number of nights* during the tax year.

*A child resides with a parent for the "night" if the child sleeps at the parent's residence. It does not matter if the parent is present that night. If the child is sleeping at a home not belonging to either parent, then the child will be considered sleeping in the home of the parent with whom the child would have resided for the night but for the absence. However, if it cannot be determined with which parent the child would have resided for the night OR if the child would not have resided with either parent, then NEITHER parent can count that night.

If a night extends over two tax years, then the "night" is allocated to the tax year in which the night begins. For example, the night of December 31, 2011 is allocated to tax year 2011.

If the child resides with each parent for an 'equal' number of nights during the tax year, then the custodial parent is the parent with the HIGHEST adjusted gross income (AGI) for the year.

Exception for Parent Who Works at Night - If, during the tax year, due to a parent’s nighttime work schedule, a child resides a greater number of days but not nights with the parent who works at night, that parent is treated as the custodial parent. On a school day, the child is treated as residing at the primary residence registered with the school.

4. U.S. Citizen OR Resident of U.S., Canada, or Mexico

The child MUST be a citizen, resident, or national of the United States, OR be a resident of Canada or Mexico for some part of the tax year.

Exception for Adopted Children

The U.S. Citizen or resident requirement does NOT apply to your legally adopted child if the child's principal place of residency is your home, the child is a member of your household the entire tax year, and you are a citizen or national of the United States.

5. Child is NOT Self-Supporting

The child CANNOT provide over 50% of his or her own support.

6. Child is NOT Married Filing a Joint Tax Return

If the child is married, you CANNOT claim that child as a dependent if he or she is filing a joint return with his or her spouse.

EXCEPTION: A joint tax return may be filed if solely to claim a refund AND the married couple is NOT required to file AND no tax liability would exist for either spouse if they had filed tax returns as married filing separately.

What Happens if the Child is a "Qualifying Child" of MORE THAN One Person?

If the child is a "qualifying child" of a parent or parents and neither parent claims the child as a qualifying child, then the child CANNOT be a qualifying child of any other taxpayer UNLESS the adjusted gross income of that taxpayer is HIGHER than the highest adjusted gross income of any parent of the child.

If the child meets the above requirements to be a "qualifying child" of more than one person and you and the other person(s) cannot agree who will claim the child as a "qualifying child" and more than one of you actually claim the child, then the following tie-breaker rules which are listed in chronological order below will determine who will be allowed to claim the dependency exemption for the child:

If the child does NOT meet the requirements for "qualifying child" defined above, the child may be considered your "qualifying relative." For more information, see "Qualifying Relative Defined" below.

To be a "qualifying relative", the person CANNOT be a "qualifying child" as defined above. The person MUST also meet the following FIVE requirements:

1. Relationship OR Member of Household

Relationship

The person MUST be your:

• Son, daughter, stepchild, foster child*, adopted child**, or a descendant of any of them (example: grandchild),

• Brother (including half-brother), sister (including half-sister), or a son or daughter of either of them (examples: niece, nephew),

• Father, mother, or an ancestor or sibling of either of them (examples: grandmother, grandfather, aunt, uncle),

• Stepbrother, stepsister, stepmother, stepfather, son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law.

*A "foster child" is any child who is placed with you by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction.

**An adopted child includes a child lawfully placed with you for legal adoption even if the adoption is NOT final. This child is considered to be a blood relative.

Member of Household

If the person does NOT satisfy the "relationship" described above, the person may be treated as a "member of household" if the person is:

• Any person (other than your spouse) who LIVED with you the ENTIRE tax year as a member of your household AND the relationship does NOT violate local law.

NOTE: If the person was born or died during the year, the person will be considered a "member of household", if the person was a member of your household till death, or lived with you the rest of the year after birth.

A "cousin" meets this test ONLY if he or she lives with you as a member of your household the entire tax year.

2. Gross Income

In general, the person CANNOT* have gross income GREATER than the amount shown below that is subject to tax:

Gross income does NOT include nontaxable income, such as Social Security benefits.

*Certain EXCEPTIONS apply to a person who is permanently and totally disabled.

3. U.S. Citizen OR Resident of U.S., Canada, or Mexico

The child MUST be a citizen, resident, or national of the United States, OR be a resident of Canada or Mexico for some part of the tax year.

Exception for Adopted Children

The U.S. Citizen or resident requirement does NOT apply to your legally adopted child if the child's principal place of residency is your home, the child is a member of your household the entire tax year, and you are a citizen or national of the United States.

4. Support

Generally, you must be able to establish that you have provided MORE than 50% of the person's total support for the year. The cost of support includes food, clothing, education, medical and dental care as well as the fair rental value of shelter provided. This must exceed the total of all other financial assistance coming from other sources, including other relatives, government entities, the dependent's savings and nontaxable income.

Special rules apply where two or more people provide the bulk of the person’s support (Multiple Support Agreements).

Children of Divorced or Separated Parents (including parents who were never married) - A child will be treated as the NONCUSTODIAL parent's "qualifying relative" if ALL of the following apply:

• The parents are divorced, legally separated, separated under a written agreement, or lived apart at ALL times during the LAST 6 months of tax year whether or not they are or were married (calendar year from July 1 to December 31),

• The child received OVER 50% of his or her support for the tax year from the parents and the rules for multiple support agreements do NOT apply,

• The child is in the custody of one or both of the parents for more than half the tax year (AT LEAST 183 nights or AT LEAST 184 nights if a leap year - These nights do NOT need to be consecutive), AND

• At least ONE of the following applies:

1. The custodial parent will sign an unconditional written declaration (usually IRS Form 8332) that he or she will NOT claim the child as a dependent for the tax year and the noncustodial parent attaches this declaration to their tax return, OR

2. If divorced or separated BETWEEN January 1, 1985 and December 31, 2008, the noncustodial parent attaches certain pages from the divorce decree or separation agreement to their tax return, OR

3. A divorce or separation agreement went into effect BEFORE 1985 and applies to the current tax year and states that the noncustodial parent can claim the child as a dependent as long as the noncustodial parent provides at least $600 for the child's support during the tax year.

NOTE: The CUSTODIAL parent is the parent with whom the child resides for the GREATER number of nights* during the tax year.

*A child resides with a parent for the "night" if the child sleeps at the parent's residence. It does not matter if the parent is present that night. If the child is sleeping at a home not belonging to either parent, then the child will be considered sleeping in the home of the parent with whom the child would have resided for the night but for the absence. However, if it cannot be determined with which parent the child would have resided for the night OR if the child would not have resided with either parent, then NEITHER parent can count that night.

If a night extends over two tax years, then the "night" is allocated to the tax year in which the night begins. For example, the night of December 31, 2011 is allocated to tax year 2011.

If the child resides with each parent for an 'equal' number of nights during the tax year, then the custodial parent is the parent with the HIGHEST adjusted gross income (AGI) for the year.

Exception for Parent Who Works at Night - If, during the tax year, due to a parent’s nighttime work schedule, a child resides a greater number of days but not nights with the parent who works at night, that parent is treated as the custodial parent. On a school day, the child is treated as residing at the primary residence registered with the school.

5. Person is NOT Married Filing a Joint Tax Return

If the person is married, you CANNOT claim that person as a dependent if he or she is filing a joint return with his or her spouse.

EXCEPTION: A joint tax return may be filed if solely to claim a refund AND the married couple is NOT required to file AND no tax liability would exist for either spouse if they had filed tax returns as married filing separately.

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