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By:  Amanda Vann, Esq.

Despite attempts by the IRS to clarify whether or not someone qualifies as a dependent, today’s complex family arrangements often raise questions as to just whom can be claimed on your tax return. There are now two classes of people who can qualify as dependents:

  • Qualifying children
  • Qualifying relatives

The Rules for Claiming a Dependent on Your Tax Return Cover:

Birth of a Child

Q: What if your child was just born this past year? Does he or she qualify as a dependent?

A: The tax rules for claiming dependents say that a qualifying child must live with you for more than half the year. Even if a child is born on December 31, he or she qualifies as a dependent and earns the full $3,900 exemption. The same rule applies if a child unfortunately passes away during the year. A child who is born or dies during the year is treated as having lived with you all year long.

Living Together

Q: Say you and your girlfriend live together. She doesn’t have a job, and you pay for the rent and all the groceries. Can you claim her as your dependent?

A: Perhaps, if she meets the requirements for a qualifying relative. That means you must have lived together all year long, her gross income must be less than $3,900, and you must have provided more than half of her support. One other test: Your living arrangements must not violate local law. The IRS notes, for example, that some states prohibit couples from living together if one party is married to someone else. In such a case, the IRS says, a dependency exemption is disallowed even if the other requirements are met.

Living Together with a Child

Q: What if your girlfriend and her two-year-old son live with you, and you basically pay all the expenses? Can you claim them both as your dependents?

A: Yes, if they meet all the IRS requirements for dependents. Did they live with you all year long? Did you provide more than half of their support? Did either of them have gross income of less than $3,900? If you can answer YES to all three questions, then you may claim both your girlfriend and her son as your dependents. (This assumes your living arrangements don’t violate local law. See above.)

Until recently, the boyfriend in this situation could not claim the child as a qualifying relative because the child was considered a qualifying child of the mother. However, the IRS now says if the parent’s income is so low that he or she doesn’t have to file a tax return, then the boyfriend who lives with the mother and child all year long can claim the child as a dependent.

Grown Children

Q: After a 28-year-old daughter’s divorce, she and her two young children moved back in with her parents. Can the parents claim all three of them as dependents on their tax returns?

A: The answer depends on how much money your daughter made in 2014. If she made less than $3,950 and you provided more than half of her support for the year, then she can be claimed as your dependent as a qualifying relative.

The same rules apply to the grandchildren. If your daughter made more than $3,950, she doesn’t qualify as your dependent, but the grandkids might because they can be qualifying children for both you and your daughter. As long as your daughter agrees to let you claim her children as your dependents, and her Adjusted Gross Income (AGI) is less than yours, then you may claim them. In that case, of course, your daughter could not claim them. If your daughter’s AGI is greater than yours, then she can claim the grandchildren but you cannot.

Children of Divorced Parents

Q: The divorce was finalized last year, and the three kids live with their mom with dad having weekend visitations. Now the dad says that since he’s paying child support, he’s going to claim them as dependents on his return. Can he do this?

A: In this situation, you should look to any separation and child custody agreements (if one was reached) or your divorce decree to see if he has been awarded that right. If the agreement or decree is silent, then the general rule for qualifying children demands that the child live with you more than half the year.

Children of divorced parents are usually dependents of the custodial parent. However, there are exceptions. The custodial parent can release the exemption to his or her ex-spouse by signing a written declaration (Form 8332) that the noncustodial spouse must attach to the tax return each year he or she claims the children as dependents. Or if your divorce decree gives your ex-spouse the right to claim the children, he can do so if he attaches key pages of that document to his tax return. Otherwise, you get to claim the children as your dependents.

Child of Separated Parents

Q: If you and your spouse separated, and your child lived with you and your spouse for the remainder of the year, who gets to claim the child? You also will be filing married-filing-separate returns this year.

A: It’s up to you and your spouse. You might decide that the parent who gets the biggest tax benefit (the one in the higher tax bracket) should claim the exemption. If you can’t agree, however, the exemption goes to the spouse with whom the child lived with more because they are deemed the custodial parent.

More information on filing your taxes when separated is available here.

Unmarried Parents

Q: If you and your partner live together and have a child but are not married, you cannot file a joint tax return. Which one of you gets to claim the child as a dependent?

A: It’s up to you and your partner. Since he or she is a qualifying child for each of you, either parent may claim the child as a dependent. If you can’t decide, the exemption goes to whichever of you reports the higher Adjusted Gross Income on your separate tax return.

Contact Us for More Information Concerning Tax Rules for Claiming Dependents

For further information on rules for claiming dependents on your taxes, whether you are single, separated, divorced, or living with your partner, contact us. The family law attorneys at Andalman & Flynn, conveniently located in the Silver Spring, MD area, will be happy to answer your questions and assist you with any other legal matters pertaining to your divorce.