how does dependency work 
a dependent may be a qualifying child or another qualifying relative dependency status is determined by irc tests to qualify for dependent status three tests must be met for all dependents the dependent taxpayer test the joint return test and the citizen or resident test any person who may be claimed as a dependent by another taxpayer may not claim anyone as a dependent on their own tax return any person who filed a joint return as a married person cannot be claimed by anyone as a dependent on their tax return unless that dependent is filing a joint return only to claim a refund of tax that was withheld or paid as estimated taxes finally to be claimed as a dependent a person must be a u s citizen u s resident immigrant u s national or a resident of canada or mexico 1if you are married and filing jointly you and your spouse can both claim dependents and share any tax benefits in the case of separate returns whether you are married or not only one taxpayer may claim a given dependent on their income tax return which is particularly crucial in cases of dual custodial parents dependency claims of separated or divorced parents are resolved in favor of the custodial parent in some cases previously determined court decrees or a written declaration by the custodial parent may release the claim to the noncustodial parent 2types of dependentsspecific tests are used to determine if a dependent is a qualifying child or a qualifying relative to meet the irc relationship test and be considered a qualifying child the child must be to meet the irc age test the child must be the resident and support tests are the final tests to determine if the individual qualifies as a qualifying child to meet the resident test the child must have lived with the taxpayer for more than half of the year however there are exceptions to this rule for example if the child or the taxpayer is temporarily absent due to illness education business vacation military service institutionalized care for a child who is permanently and totally disabled or incarceration then the child is still considered part of the residence living with the taxpayer during this time 4the support test requires that the child cannot have provided more than half of their own financial support during the tax year 5you may be eligible to file as head of household even if the child who is your qualifying person has been kidnapped this treatment applies for all years until the year when there is a determination that the child is no longer alive or the year when the child would have reached age 18 whichever is earlier 6if these tests are not met the taxpayer may decide to see if the tests for a qualifying relative are met these tests are slightly different and are applied only when the tests for a qualifying child are not met unlike a qualifying child a qualifying relative can be any age 7a qualifying relative must meet the not a qualifying child test the member of household or relationship test the gross income test and the support test in addition a child cannot be a taxpayer s qualifying relative if the child is the taxpayer s qualifying child or is the qualifying child of any other taxpayer 8to meet the member of household or relationship test the person either must live as a member of the taxpayer s household all year or be related to the taxpayer it is important to note that an adopted child is treated the same as a natural child and that any relationships established by marriage are not ended by death or divorce 9to meet the gross income test the dependent s gross income for the tax year must be less than the threshold amount 10 this amount changes every year for the 2023 tax year the tax return filed in 2024 it is 4 700 it increases to 5 050 for 2024 1112the deduction for personal and dependency exemptions is suspended until 2025 although the exemption amount is zero the ability to claim a dependent may make you eligible for other tax benefits 13finally to meet the support test the taxpayer must have provided more than 50 of the person s total support for the tax year this support test should be differentiated from the one for a qualifying child which tests whether the child provided more than half of their own support for the year 10dependent tax considerationsboth being a dependent and having a dependent can impact your tax return tax credits and deductions if the irc tests determine that you are a dependent then you may be eligible for certain tax credits and deductions on your own tax return investopedia s tax savings guide can help you maximize your tax credits deductions and savings order yours today the earned income tax credit eitc is a refundable tax credit for low to moderate income working individuals and couples particularly those with children the amount of eitc benefit a taxpayer receives depends on income and the number of children in their household 14the eitc is for 2023 and 2024 taxpayers can claim a child tax credit ctc of up to 2 000 for each child under age 18 if a taxpayer s income is not more than 200 000 or 400 000 if married filing jointly 17 if the credit exceeds the total taxes owed taxpayers will receive up to 1 600 2023 or 1 700 2024 of the balance as a refund through the additional child tax credit 1819you may be able to claim the child and dependent care credit if you paid expenses for the care of a qualifying individual to enable you and your spouse if filing a joint return to work or actively look for work the amount you receive is a percentage of the work related expenses you paid to a provider for the care of a qualifying individual and the percentage depends on your adjusted gross income agi 20the credit is capped at 35 of eligible expenses for those that make less than 15 000 per year up to 3 000 for one qualifying individual and 6 000 for two or more qualifying individuals 21the two education credits are the american opportunity tax credit aotc and the lifetime learning credit llc if the taxpayer has a dependent who attends a higher education institution then the taxpayer will be eligible to claim the education credits associated with the dependent the aotc is a credit for qualified education expenses paid for an eligible student for the first four years of higher education 22 the llc is for qualified tuition and related expenses paid for eligible students enrolled in an eligible educational institution 23