Dependents aren’t just ne’er-do-well children that lay about your house smoking up “the weed.” Many of your other loafing relatives can qualify, but it can be complex to figure out who.
Definition: A “dependent” is generally a child or other relative of a good person, hereafter referred to as the “taxpayer.” That taxpayer must not be the dependent of someone else, obviously, or they wouldn’t be a good person/taxpayer to begin with.
A dependent must also:
- Be filing as a) Unmarried or b) Married and filing by themselves or c) Married and filing jointly but only to claim a refund of their withheld taxes and neither the dependent or the dependent’s spouse can claim the personal exemption on their joint return.
- Be a US Citizen, a US Permanent Resident, a Canadian Resident, or a Mexican Resident for part of the year.
- Have at least half their support provided by the taxpayer/good person during the tax year, which includes food, clothing, shelter, education, medical and dental care, recreation, and transportation. Be careful though, if they got welfare, food stamps, or housing from the state, that counts as support that the taxpayer didn’t provide.
Then, after that, there are special rules for children and other relatives. For “Children:”
- They must be the taxpayer’s son, daughter, stepchild, eligible foster child, adopted child, or a direct descendant of one of those (like a grandchild) or they must be the taxpayer’s brother, sister, half-brother, half-sister, stepbrother, stepsister, or a descendant of one of those (like a niece).
- They must be younger than the taxpayer and under the age of 19 unless they are a full-time student under the age of 24 at the end of the year, or unless they are permanently and totally disabled at any point during the year regardless of age.
- They must have lived with the taxpayer for more than half of the year unless they meet an exemption for sickness, education, business, vacation, military service, or the birth or death of a child.
For a “Relative:”
- The taxpayer either must have lived with the dependent all year as a member of the household, regardless if they’re actually related, or they must be related in a way that is listed in the following section.
- Allowable relationships that meet the previous paragraph’s requirements, but do not require the lazy dependent to have lived with the taxpayer, are child, parent, full sibling, stepparent, stepchild, stepbrother or stepsister, half-brother or half-sister, grandparent, grandchild, son-in-law or daughter-in-law, parent-in-law, siblings-in-law, or blood related aunt or uncle or niece or nephew. Note that does not include cousins.
- The indolent dependent must also not have made more than $3,950 during the tax year, which should be easy because they’re good-for-nothing and lazy, obviously.
There are special rules for children born, adopted, or fostered during the year.
Effect of dependents: Each dependent deduction is generally worth $4,050 on a taxpayer’s 2016 and 2017 federal income tax returns. Eventually, if the taxpayer and his wife have been industrious and prosperous and earn $311,300 or more in the year, the benefit will be reduced ($259,400 for the single industrious taxpayer).
A reminder, no matter how lazy our theoretical taxpayer’s husband is, she can’t claim him as a dependent. Spouses, even the really, really, grossly lazy ones, aren’t dependents. They’re spouses, which is both different and supposed to be better.
Obviously the issue of dependents is really complicated, and we recommend professional help if you think you have one. After that therapy, you may also want professional tax advice to help you determine whether they are a dependent, and how to claim them on your taxes if they are. Tardy & Co., PC is obviously pretty good at that, so we recommend ourselves.
Tags: weirdly funny