08 August 2009
Having a qualifying child may enable you to claim several income tax benefits, such as Head of Household filing status, the exemption for a dependent, the Child Tax Credit, the Child and Dependent Care Credit, and the Earned Income Credit.
A child is considered to be a qualifying child if the child meets all of the following conditions:
  • Relationship — The child must be your child or stepchild (whether by blood or adoption), foster child, sibling or stepsibling, or a descendant of one of these.
  • Residence — The child must live with you for more than half the tax year. Some exceptions apply for children of divorced or separated parents, kidnapped children, temporary absences, and for children who were born or died during the year.
  • Age — The child must be younger than 19 at the end of the tax year, or younger than 24 if a full-time student for at least 5 months of the year. Children who are permanently and totally disabled at any time during the year qualify regardless of age.
  • Support — The child can't provide more than half of his own support for the year.

A child is not considered to be your qualifying child, even if the above tests are met, if you are not required to file a tax return and either do not file a tax return or file a tax return solely to get a refund of income tax withheld. So, another person who is unrelated to the child may be able to claim an exemption for the child as a qualifying relative.

New for 2009:

Beginning with the 2009 tax year, a qualifying child must be younger than you, and a child will not qualify if the child files a joint return — unless the return is filed only as a refund claim. If the parents of a child can claim the child as a qualifying child, but no parent claims the child, another person can claim the child as a qualifying child — only if that person's adjusted gross income (AGI) is higher than the highest AGI of any parent of the child.

What is a qualifying relative?

A person is a qualifying relative if that person is not a qualifying child and meets the following requirements:
  • Gross income — The person has gross income of less than $3,500 for the year.
  • Support test — You must have provided more than half that person's support for the year.
  • Member of household or relationship test — The person must have either lived with you for the entire year as a member of your household or be related to you. Certain relatives are not required to live with you for the entire year.

Many exceptions and special rules apply. See IRS Publication 501.

Tiebreaker Tests

If a child is the qualifying child of 2 people, those individuals can decide who will claim the child as an exemption, and for the Child Tax Credit, Head of Household status, the Child Care Credit and Exclusion for Employer-provided Child Care Benefits, and the Earned Income Credit. If more than 1 individual claims any of these benefits with respect to the child, the IRS will use the following tests to determine who gets to claim the child as a dependent (and for the other tax benefits):
  • If only 1 of the individuals is the child's parent, the parent claims the child.
  • If the 2 people are the child's parents and they don't file a joint return, the individual with whom the child lived longer during the year claims the child. If the child lived with the parents the same amount of time, the child is claimed by the parent with the higher adjusted gross income.
  • If none of the individuals are the child's parent, the individual with the highest adjusted gross income claims the child.
The tiebreaker rules apply if 2 or more people can claim any of the above benefits, even if only 1 of them does so. This means that individuals will no longer be able to decide who claims the tax benefits.


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Topic: Marriage and Family