Dependent Exemptions
by: Low Income Taxpayer Clinic (LITC)
What is a dependent exemption?
A dependent is a person, other than you or your spouse, who you support. A dependent exemption is a tax deduction on your tax return. A dependent exemption allows you to subtract a certain amount from your income when determining how much you owe in taxes. A dependent exemption is not a cash benefit. It will only reduce your taxes. If you do not owe enough taxes, it will not give you money back.
Can I claim a dependent exemption?
To claim someone as a dependent, you must meet all of the following five tests:
- Member of household or relationship test;
- Citizen or resident test;
- Joint return test;
- Gross income test; AND
- Support test.
Member of household or relationship test
To meet the member of household or relationship test, the person must have either lived with you for the entire year or must be related to you in one of the following ways:
- Child, grandchild, great grandchild, or stepchild (a legally adopted child is considered your child);
- Brother, sister, stepbrother, or stepsister;
- Parent, grandparent, or stepparent;
- Aunt, uncle, niece or nephew;
- Father-in-law, mother-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law.
Note: Any of the above relationships that were established by marriage are NOT ended by death or divorce.
A person who is related to you in one of the above ways does not have to live with you in order to meet the relationship or member of household test.
However, if the person is not related to you in one of the ways listed above, s/he must have lived in your household for the entire year. A person who died during the year, but was a member of your household until death, will meet the member of household or relationship test.
Citizen or resident test
The dependent must be either:
- A citizen or resident of the United States (does not have to be a legal resident); OR
- A resident of Mexico or Canada.
Joint return test
In most cases, you cannot claim an exemption for a dependent who files a joint tax return with someone else, even if that person meets all of the other dependency tests.
Gross income test
Generally, in order to claim a dependent exemption, your dependent must either:
- Earn less than a certain amount ($3,050 in 2003); OR
- Be your child and under the age of 19 at the end of the year; OR
- Be your child and a full-time student under the age of 24 at the end of the year. In general, a person is a full-time student if they are enrolled full-time for at least five months of the year.
Support test
In general, you must provide over one-half of a dependent's total support for the entire year to meet the support test.
To determine whether you provide over one-half of the person's support, compare the amount of support that you gave the person to the total support that the person received from all sources. Support includes food, clothing, medical, dental, education, housing, utilities, transportation and recreation.
Benefit payments like welfare, food stamps and housing vouchers are support provided by the government. If you received public benefits and used the benefits to pay for the dependent's support, this is NOT considered support from you.
Who can claim my child as a dependent if I am divorced or separated?
In most cases, the parent who has physical (it does not have to be legal) custody of the child for most of the year is treated as the parent who provides more than half of the child's support. The parent without physical custody (non-custodial parent) can claim the child as a dependent only if the following are true:
- The non-custodial parent can prove that s/he provided more than half of the child's support. Even if a parent pays child support payments every month, this does not necessarily mean that s/he paid over one-half of the dependent's support; AND
- The custodial parent is willing to give the dependent exemption to the non-custodial parent by signing IRS Form 8832.
A divorce order does not bind the IRS. Even if you have a divorce order giving you the right to claim the exemption, you will still have to meet all five of the above dependency tests.
For more information, please see "Post-Dissolution Tax Information."
Tax Information and Resources
The following resources can provide you with more tax information and/or assistance with filing your taxes:
- Volunteer Income Tax Assistance (VITA): 1-800-829-1040
- I-CAN e-filing allows you to file your taxes and apply for the Earned Income Credit for free at: http://www.icanefile.org
- IRS Tax Information for Individuals: http://www.irs.gov/individuals/index.html
- MLSA Low Income Taxpayer Clinic gives low-income taxpayers free legal assistance on federal tax matters year round: (406) 543-8343 or (800) 999-4941 or (800) 666-6899 or (800) 926-3144.
Revised 10/04
The clinic listed herein is partially funded through matching grants provided by the Internal Revenue Service pursuant to the Internal Revenue Service Restructuring and Reform Act of 1998. The partial funding by the IRS does not imply that the clinics have a preferential relationship with the IRS. The decision of whether to use these clinics is your own and their use will not affect your rights before the IRS.
Call the MLSA HelpLine for legal assistance:
(800) 666-6899
Low Income Taxpayer Clinic
304 North Higgins Avenue
Missoula, Montana 59802
(406) 543-8343
(800) 686-4574
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