How to Claim Dependents on Tax Forms
Claiming dependents on you tax returns has many benefits, mainly financial. Claiming a dependent can decrease your taxes. Once you have a person that qualifies, there are additional credits set by the IRS that cannot only save you a great deal of cash, but may also qualify you for a refund if no taxes are due.
Determine if you are Eligible
Before claiming dependent tax forms it is necessary to determine if you and the child are eligible. First access IRS publications and resources to determine if a child is qualified.
Qualifying Child Rules
A qualifying child must be your son, daughter, stepchild, eligible foster child, or grandchild. A brother, sister, niece, nephew, or adopted child also will qualify. The child must be 19 years old or younger and a member of your house for more than half of the year.
Qualifying Relative Rules
A qualifying relative cannot meet the criteria of a qualifying child. This person cannot earn more than $3,300 in income, and must have resided in your household for more than half the year.
Support Test
In order for you to claim someone as a dependent on your taxes, the main rule is that you must support them. More specifically, this means you must have provided more than half of their financial support for the tax year you are filing. A quick test is to verify that the child resided under your roof for a majority of the year. For a qualifying relative, the taxpayer has to prove that the taxpayer provided more than half of the dependents support.
Other Tax Credits
Other benefits of claiming dependents is that these dependents, combined with your income level, may qualify you for additional tax credits and deductions.
Child and Dependent Care Credit
The Child and Dependent Care Credit gives you up to a $3000 of credit if you paid someone to take care of your child, spouse or dependent during the tax year. The qualifying person must be your dependent child age 12 or younger when the care was received.
Child Tax Credit
The Child Tax Credit gives you up to $1000 per qualifying child. Each child must be 17 years old or younger.
Earned Income Credit
The Earned Income Tax Credit is an income tax credit for low to moderate income working individuals and families. The EITC is refundable regardless of your tax liability.