How Much Can a Child Earn and Still Be Claimed as a Dependent

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Rules for Claiming a Dependent on Your Tax Return

Updated for Tax Year 2022 • January 13, 2022 06:41 PM

OVERVIEW

Claiming dependents tin can help yous save thousands of dollars on your taxes. However many of us are not enlightened of who in our family unit may qualify as our dependent. Review the rules for claiming dependents here for a qualifying child or relative.

For information on the third coronavirus relief package, please visit our "American Rescue Plan: What Does it Hateful for Y'all and a Third Stimulus Check" blog postal service.

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Cardinal Takeaways

• For tax year 2021, the Child Taxation Credit is up to $3,600 or $3,000, depending on the age of your kid. The Credit for Other Dependents is worth up to $500.

•The IRS defines a dependent every bit a qualifying child under age 19 (or under 24 if a full-fourth dimension pupil) or a qualifying relative who makes less than $4,300 a year (tax year 2021).

•A qualifying dependent may have a job, just you must provide more than half of their annual back up.

•You lot cannot merits a person who claims another dependent on their taxes, files a joint taxation return with a spouse (except in some cases defined past the IRS), or is claimed as a dependent on someone else'south tax return.

Having trouble deciding if your Uncle Jack, Grandma Betty or daughter Joan qualifies as a dependent? Here'due south a cheat sheet to quickly assess which of your family members yous tin can claim on your tax return.

Why merits someone as a dependent?

If you have a family, you demand to know how the IRS defines "dependents" for income taxation purposes. Why? Because it could salve you thousands of dollars on your taxes. For tax years prior to 2018, every qualified dependent you claim, you reduce your taxable income by the exemption corporeality, equal to $4,050 in 2017. This adds up to substantial savings on your tax bill.

For tax years 2022 through 2020, exemptions have been replaced by:

an increased standard deduction
a larger Child Tax Credit (at present worth up to $2,000 per qualifying child)
a bigger Boosted Child Revenue enhancement Credit (upwards to $ane,400 per qualifying child)
as well as a new Credit for Other Dependents, which is worth up to $500 per qualifying dependent (not to be confused with the Child and Dependent Care Credit)

For your 2022 revenue enhancement return that you lot will prepare in 2022, the Child Taxation Credit is expanded by the American Rescue Plan raising the per-kid credit to $3,600 or $3,000 depending on the age of your child. The credit is likewise fully refundable for 2021. To get money into the hands of families faster, the IRS will be sending out advance payments of the 2022 Child Tax Credit beginning in July of 2021.For updates and more information, please visit our 2021 Child Tax Credit weblog mail.

Dependent rules too utilize to other benefits:

such equally the Earned Income Tax Credit
the Kid and Dependent Intendance Credit for daycare expenses
medical expenses, various other itemized deductions and most tax credits that involve children or family unit issues

Qualifying for these benefits can spell the departure between owing money and receiving a refund.

The bones rules aren't complicated. Only it can be difficult to apply those rules to certain family situations. That's peculiarly true if you have a son off at college, a cousin who stays with you during the summertime, or a girl with a role-time job. The checklist below will help y'all decide which relatives you can claim every bit dependents.

Who qualifies every bit a dependent?

The IRS rules for qualifying dependents cover just most every conceivable situation, from housekeepers to emancipated offspring.

Fortunately, most of us live simpler lives. The basic rules will cover virtually everyone. Here's how it all breaks downwardly.

There are two types of dependents, each subject to different rules:

A qualifying child
A qualifying relative

For both types of dependents, yous'll demand to reply the following questions to determine if you tin claim them.

Are they a citizen or resident? The person must be a U.Due south. citizen, a U.S. national, U.S. resident, or a resident of Canada or Mexico. Many people wonder if they tin claim a foreign-exchange student who temporarily lives with them. The answer is maybe, but only if they encounter this requirement.
Are you lot the only person challenge them every bit a dependent? Yous tin't claim someone who takes a personal exemption for himself or claims another dependent on his own revenue enhancement form.
Are they filing a articulation return? Y'all cannot claim someone who is married and files a joint tax return. Say yous support your married teenaged son: If he files a joint return with his spouse, you can't claim him as a dependent.

TurboTax Tip: The inclusion of qualified dependents on your tax return is one of the best revenue enhancement benefits available. It can open up the door to a large number of revenue enhancement credits and deductions that can lower your tax neb.

Qualifying child

In addition to the qualifications above, to claim an exemption for your child, you must be able to answer "yes" to all of the following questions.

Are they related to you lot? The child tin be your son, daughter, stepchild, eligible foster child, brother, sister, half brother, half sister, stepbrother, stepsister, adopted child or an offspring of any of them.
Do they see the age requirement? Your child must be under historic period 19 or, if a full-time educatee, under historic period 24. There is no age limit if your child is permanently and totally disabled.
Do they alive with you? Your kid must alive with you lot for more than one-half the year, but several exceptions utilise.
Do you financially back up them? Your child may take a job, but that job cannot provide more than half of her support.
Are you the only person challenge them? This requirement usually applies to children of divorced parents. Here you must use the "necktie breaker rules," which are found in IRS Publication 501. These rules establish income, parentage and residency requirements for challenge a kid.

Qualifying relative

Many people provide support to their aging parents. But merely because you mail service your 78-twelvemonth-old mother a check every once in a while doesn't hateful yous tin claim her as a dependent. Here is a checklist for determining whether your mom (or other relative) qualifies.

Do they live with you? Your relative must live at your residence all year or be on the list of "relatives who do non live with y'all" in Publication 501. About xxx types of relatives are on this list.
Exercise they brand less than $4,300 in 2022 or 2021? Your relative cannot have a gross income of more than $4,300 in 2022 or 2022 and be claimed by you as a dependent.
Do you financially support them? You must provide more than half of your relative's total support each yr.
Are you the just person claiming them? This means you lot can't claim the same person twice, once as a qualifying relative and again equally a qualifying child. It also means you tin can't merits a relative—say a cousin—if someone else, such as his parents, as well claim him.

We figure information technology out for you

The inclusion of qualified dependents on your taxation render is ane of the best tax benefits available. It can open the door to a large number of taxation credits and deductions that tin can lower your tax beak. TurboTax will ask you simple, plain-English questions about your family and will make up one's mind for you who qualifies equally a dependent on your tax return, so you can be sure yous're getting the biggest refund you deserve.

Oftentimes asked questions

Can I claim my child as a dependent if she has a part-time job?
Yep, as long equally the child does not provide more than than half of their ain support and meets other criteria noted above.
I support my 67-year-one-time sis-in-law. Is she qualified to be counted as a dependent on my tax return?
Yep, because sisters-in-law meet the relationship requirement and there is no age limit for qualifying relatives. Other guidelines apply.

Think, with TurboTax, we'll ask yous simple questions near your life and help yous fill out all the right taxation forms. With TurboTax you can be confident your taxes are done right, from simple to complex taxation returns, no thing what your situation.

All you need to know is yourself

Answer simple questions about your life and TurboTax Free Edition will take intendance of the rest.

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The to a higher place article is intended to provide generalized financial data designed to educate a wide segment of the public; it does non give personalized tax, investment, legal, or other concern and professional person communication. Before taking whatever action, you should ever seek the assistance of a professional who knows your particular situation for advice on taxes, your investments, the law, or any other business and professional person matters that touch yous and/or your concern.

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How Much Can a Child Earn and Still Be Claimed as a Dependent