Claiming Dependents: Adult Children, Parents and Non-Relatives

June 3, 2015 by Ed Becker

With the recent recession and the tougher job market, many families are faced with having adult children come home to live after college or stay at home longer while they go to school or look for work. Elderly parents also may need care or assistance at some point. Even your significant other and/or their child or roommates that you provide support for could possibly qualify as a dependent exemption on your tax return.

Adult Children

When you have adult children that either do not leave home right after high school or who return home at some point after age 19, you could possibly claim them as a dependent. There are certain conditions that allow you to either claim the child as a Qualifying Child or as a Qualifying Relative, if you meet the conditions.

• Qualifying Child

There are the four tests to determine dependency: Relationship, Residence, Age and Support. If these tests are met, the child is a dependent. The IRS defines a child as someone who is under 24 and their parents provide more than half of their income. A qualifying child is someone who meets the age requirement, and either lives with you more than half the year or meets residency requirements.

• Qualifying Relative

If your child does not meet the requirements as a qualifying child, usually due to age, they may still qualify as a relative. The tests for a qualifying relative are the same whether it is your child or another person.

 

Qualifying Relative-Not your child

There are tests and requirements to claim someone as a Qualifying Relative as well. It is different than a qualifying child, but it can be your child if they do not meet the qualifying child tests. The relationship test only comes into play if the person did not live with you the entire year. The person’s income has to be less than the exemption amount in order to claim them.

 

• Parent- if you provide more than half of the financial support for your parent, you can claim the exemption for them. If you shared the burden with others and no one person provided more than half of the support one person can be selected to take the exemption. Each party that has contributed more than 10% of the support has to fill out Form 2120 to be filed with the return of the person claiming the parent.

 

• Significant Other- if you provided more than half the support for your SO and they lived with you the whole year, you are allowed to claim them as a dependent.

 

• Child of a Significant Other- Recently the IRS changed this rule to allow someone whom provided more than half the support of the child and the child lived with them for the full year to take the dependency exemption.

 

Claiming the dependent exemption not only gives you the exemption amount, it can also offer other tax benefits depending on your specific situation. It is wise to check with your tax professional in ensure you file correctly.