What are the dependency tests?


A dependent is a person other than the taxpayer or spouse who entitles the taxpayer to claim a dependency exemption. There are two different dependency categories. They are: qualifying child and qualifying relative. Each dependency exemption decreases income subject to tax by the exemption amount. The exemption amount for a dependent in tax year 2013 is $3,800. A taxpayer cannot claim a dependency exemption for a person who can be claimed as a dependent on another tax return.

Qualifying Child
To claim a qualifying child dependency exemption, all of the following dependency test must be met.

  • Member of household or relationship test
  • Citizen or resident test
  • Joint Return test
  • Age or Student test
  • Support test

Member of household-The person must live with the taxpayer for more than half the entire year as a member of the taxpayer's household. You do not have to own the principle of abode or pay the maintenance costs, but the child must live with you. For over half the year. The dependent must live with the taxpayer all year except for temporary absences. (Temporary absences include attending school, taking vacations, and staying in the hospital.)

Relationship- The person must be related to the taxpayer in one of the allowable ways. They are: child, brother/sister, stepchild, stepbrother/stepsister, half brother/half sister, grandchild, niece/nephew or a legally adopted child or a child lawfully placed for adoption, as well as a foster child.

Citizen or Resident Test – The child is a U.S. citizens or national, or residents of the US Canada or Mexico.

Joint Return Test - Taxpayers will meet this test for persons who are
- married but do not file a joint return, or
- married and file a joint return only to claim a refund of withheld tax; neither would have a tax liability on separate returns; neither the dependent nor spouse can claim personal exemptions on their joint return.

Age or Student Test – The child is under the age of 19 years of age at the end of the year, or under the age of 24 years of age at the end of the year and is a full-time student for at least 5 months. This test does not apply to a child who is permanently and totally disable at any time during the year..

Support Test – The child will meet this test if the taxpayer provided more than half of a person's total support for the entire year.

Total support items include
- food, clothing, shelter, education, medical and dental care, recreation, and transportation; and - welfare, food stamps, and housing provided by the state.

Qualifying Relative
To claim a qualifying relative dependency exemption, all of the following dependency test must be met.
- Relationship test
- Gross Income Test
- Support test
- Citizen or resident test
- Joint Return test

Relationship- The following relatives meet this test, however, they do not have to live with the taxpayer. Unrelated or distantly related persons not listed will meet this test if they live with you. They are: children, great or grandchildren, who are not qualifying children. For example, if your child is not a qualifying child for 2013 because he or she does not meet the age/student test or the principle place of abode test, the taxpayer may still be able to claim an exemption for the child as your qualifying relative, but only of he or she has gross income under the $3,800 limit and you provide over 50% of his or her support. The same rules applies for brother/sister,, stepbrother/stepsister, half brother/half sister, niece/nephew. Parents, grandparents, great-grandparents, step-parents, son/daughter in-laws, father or mother in-laws, and brothers/sisters in-law. If related by blood uncles and aunts. A relative not listed above, such as a cousin, or unrelated person, meets the relationship test if he or she is a member of your household and your home is his or her principal home for the entire year, except for temporary absences due to schooling, vacationing, being away on business, serving in the military or being confined to a hospital. A person cannot meet the member of household test if the relationship violates local laws. For example, if the taxpayer lives with a person married to someone else and the relationship violates the laws of the state where they live, you cannot claim an exemption for that person. I will caution you that it is not your responsibility to tell a client whether or not they can claim a person as a dependent. You should only read them the relationship requirements and if is his decision to complete his or her return as they deem necessary.

Gross Income Test - A person meeting the above relationship test cannot be claimed as a qualifying relative if he or she had gross income for the tax year of $3,800 or more. This is true even if you provided most or all of that person’s support.

Support Test - A person cannot be a qualifying relative unless the taxpayer provides over half of his or her total support for the year.
Citizen or Resident Test - The child is a U.S. citizens or national, or residents of the US Canada or Mexico.

Joint Return Test - Taxpayers will meet this test for persons who are
- married but do not file a joint return, or
- married and file a joint return only to claim a refund of withheld tax; neither would have a tax liability on separate returns; neither the dependent nor spouse can claim personal exemptions on their joint return.