{"id":7560,"date":"2022-03-03T15:00:56","date_gmt":"2022-03-03T20:00:56","guid":{"rendered":"https:\/\/www.realtyhop.com\/blog\/?p=7560"},"modified":"2022-03-04T14:52:30","modified_gmt":"2022-03-04T19:52:30","slug":"claiming-an-adult-dependent","status":"publish","type":"post","link":"https:\/\/www.realtyhop.com\/blog\/claiming-an-adult-dependent\/","title":{"rendered":"Everything You Need to Know About Claiming an Adult Dependent on Your Taxes"},"content":{"rendered":"
There are many different ways you can potentially reduce your current tax obligations. One of the most common methods to lower a tax bill is to claim someone as a dependent. Depending on your current financial situation, claiming someone as a dependent can potentially reduce your current tax burden by thousands of dollars per year.<\/span><\/p>\n It’s important to know that dependents come in many different forms\u2014there are plenty of people who might qualify as a dependent other than your children. In fact, millions of American households will claim an “adult dependent” on their taxes every year. However, to correctly claim anyone as a dependent while filing your taxes, you will first need to make sure they actually qualify.<\/span><\/p>\n Whether you have personally filed your taxes before or not, you probably have a lot of questions. Below, we will discuss the most important things to know about claiming an adult dependent. We will also discuss how to claim a dependent, in general. By taking the time to understand this process, you can potentially minimize your tax obligations and avoid some common filing mistakes.<\/span><\/p>\n The Internal Revenue Service (IRS) has developed specific guidelines for who can legally qualify as a dependent, though most tax lawyers believe this definition is likely to change by 2025. Keeping this in mind, the IRS’s current definition of a dependent is someone “other than the taxpayer or spouse” who qualifies for a dependence exemption. In other words, the definition is currently pretty vague.<\/span><\/p>\n Generally speaking, a dependent is someone who depends on you for financial support. A dependent is not a roommate or someone you happen to be living with unless you are also the primary source of financial support for this person.<\/span><\/p>\n Of course, whether you are truly a source of financial support can often be up for interpretation (a teenager with a summer job can likely be claimed as a dependent, whereas someone you simply gave some money to probably doesn’t qualify as a dependent). For someone to be claimed as a dependent\u2014regardless of age\u2014you’ll need:<\/span><\/p>\n If you are hoping to get dependent benefits at both the federal and state levels (and, for some cities, the municipal level), you’ll need to ensure that you follow all local laws. When in doubt, check with an accountant or lawyer to ensure you can claim an adult dependent\u2014claiming someone who does not qualify can have future legal or financial consequences.<\/span><\/p>\n Yes, you sure can, as long as your adult child is a qualifying child. According to the IRS, the child must be<\/p>\n In addition, the adult child must have been living with you for more than half of the tax year. The child also must not have provided more than half of their own support for the year. Lastly, if the child meets the rules to be a qualifying child for more than one person, you must be the person entitled to claim the child as a dependent.<\/p>\n The Tax Cuts and Jobs Act (TCJA) dramatically changed tax laws in the United States. After the Act was passed in 2017, the previous personal exemption and dependent exemptions were eliminated. In other words, it is not as easy to claim an adult dependent as it was in years past.\u00a0<\/span><\/p>\n These exemptions are currently set to return in 2026. However, even with the TCJA, there are still a few ways you can claim a dependent. Dependents can still be claimed for the Child and Dependent Care Tax Credit, as long as they meet the basic requirements. Additionally, you can also file as head of your household and improve your tax position even further.<\/span><\/p>\n The TCJA includes a tax credit for “other dependents,” which can be used for individuals above the age of 16. For those who are under 16, you can use the child tax credit. As long as the people you are claiming as a dependent meet the standards outlined by the IRS (further described below), you will be able to reduce your household tax obligations by $500 per dependent.\u00a0<\/span><\/p>\n To start with, both you and each person you are claiming as a dependent must be a U.S. citizen, a U.S. national, or a U.S. resident alien. They can also be citizens of Canada or Mexico. The person being claimed as a dependent will not be able to claim any dependents of their own, though they can still work and generate a limited amount of income.<\/span><\/p>\n For an adult (anyone 17 or older) to be claimed as a dependent, they must live with you or have a close relationship with you. “Close relationships” can include parents, grandparents, siblings, half- and step-siblings, aunts and uncles, nieces and nephews, in-laws, and some others.<\/span><\/p>\n For a person to be claimed as a dependent, their personal income must be less than $4,300 (tax year 2021). There is, however, an exception if the person is disabled and has income from a sheltered workshop. Additionally, you must be able to satisfy the “support rule.” To meet the rule, you must personally provide more than half of all financial support.<\/span><\/p>\n The tax code is complicated and is always changing. It is quite possible that dependency requirements will change again before the end of the fiscal year. Therefore, it will be essential to closely follow these developments before making any credit or deduction claims on your taxes. However, as long as you meet these basic conditions, you will be able to claim a person as a dependent on your taxes. In some cases, that can mean big savings on taxes.\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":" There are many different ways you can potentially reduce your current tax obligations. One of the most common methods to lower a tax bill is to claim someone as a dependent. Depending on your current financial situation, claiming someone as a dependent can potentially reduce your current tax burden by thousands of dollars per year. […]<\/p>\n","protected":false},"author":14,"featured_media":7561,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","footnotes":""},"categories":[2239,2447],"tags":[],"class_list":["post-7560","post","type-post","status-publish","format-standard","has-post-thumbnail","category-featured","category-personal-finance"],"yoast_head":"\n
<\/p>\nWho Can I Claim as a Dependent?<\/span><\/h2>\n
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Can I Claim My Adult Child as a Dependent?<\/h2>\n
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Laws Affecting Dependent Status<\/span><\/h2>\n
Claiming a Tax Credit for “Other Dependents”<\/span><\/h2>\n
Making Sure You Qualify<\/span><\/h2>\n