The Internal Revenue Service Code in the United States has assigned a value of one exemption for each claimable dependent on federal tax returns. There are two categories into which dependents fall: qualifying child or qualifying relative. A taxpayer’s dependents may be culled from both categories.
What is the difference between these two categories of dependents? The category of qualifying child is defined narrowly whereas the criteria for qualifying relative are expansive. As always, the differences inhere in the details.
Guidance toward gaining a general understanding of these categories of dependents is provided herein. Specific questions should be directed to the Internal Revenue Service (1-800-829-1040) or to specialists, such as tax accountants, tax attorneys, or accredited tax preparers.
Eligibility for qualifying child status is restricted to certain relationships and is capped by age parameters.
Qualifying Child / Relationship: Relevant relationships are defined, vis-à-vis the taxpayer, as:
- daughter, son, stephchild, foster child;
- brother, half brother, stepbrother;
- sister, half sister, stepsister;
- descendants of any of the above, such as grandchild, nephew, or niece.
Qualifying Child / Age: Generally, the qualifying child must be younger than the taxpayer, if filing an individual return, or younger than the taxpayer or the taxpayer’s spouse, if filing a joint return.
- One age cap requires that the qualifying child must be under the age of 19 at the end of the tax year.
- Qualifying child status, however, applies through the age of 23 for students.
Student status is defined as full-time enrollment in a school for some part of five calendar months. The five months may be consecutive or non-consecutive. Also included as students are those who participate in full-time, on-farm training courses offered through a school or by a county, local, or state governmental agency. Acceptable places of instruction include elementary schools, junior and senior high schools, colleges, universities, and mechanical, technical, and trade schools. Nevertheless, qualifying child student status is not allowed for those who are taking on-the-job training courses, correspondence courses, or courses offered only through the Internet.
An exception to the age restriction is allowed for a qualifying child who, at any time in the tax year, is diagnosed with a disability which is expected to last continuously for at least one year or to lead to death.
Qualifying Child / Residence: Apart from temporary absences for special circumstances, a qualifying child is required to have lived with the taxpayer for more than half of the tax year. Special circumstances which count toward amount of time lived in taxpayer’s home include attendance at school, detention in a juvenile facility, and treatment in a medical facility.
Qualifying Child / Support: A qualifying child must not provide over half of her/his support for the tax year.
Qualifying Child / Joint Tax Return: Married dependents who file their own joint return are eligible for qualifying child status if they are not claiming exemptions for themselves or anyone else on their tax return and if their return is being filed only as a claim for a refund either of withheld income tax or of estimated tax payments.
Qualifying Relative: Not a qualifying child
A dependent who is eligible for qualifying child status on a taxpayer’s return is excluded from consideration for qualifying relative status.
Qualifying Relative / Age: There are no age limitations or requirements for qualifying relative status.
Qualifying Relative / Relationship or residence: There are two categories of qualifying relatives:
those who do not have to live with the taxpayer, and
those who are required to be members of the taxpayer’s household.
Qualifying relatives who do not need to reside with the taxpayer are defined, vis-àvis the taxpayer, as:
- daughter, son, stepchild, legally adopted child, foster child, or any of their descendants;
- brother, half brother, or their children;
- sister, half sister, or their children;
- father, mother, grandparent, or their direct ancestors or siblings;
- stepfamily: stepbrother, stepsister, stepfather, stepmother;
- relatives by marriage: daughter-in-law, son-in-law, father-in-law, mother-in-law.
For qualifying relative purposes, relationships established by marriage are not dissolved by death or divorce.
Qualifying relative status also is available to persons other than the taxpayer’s spouse and above-listed relatives. For example, cousins are assigned to this category. Residence in the taxpayer’s house is required for this category throughout the entire year, apart from temporary absences for special circumstances, such as education, illness, or military service. Also, the relationship must not be in violation of local law.
Qualifying Relative / Income: The total taxable income of a qualifying relative is restricted, for tax year 2013, to less than $3,900.
Qualifying Relative / Support: Generally, qualifying relatives must receive over half of their support from the taxpayer. Exceptions to this requirement pertain to children of divorced or separated parents, kidnapped children, and multiple support agreements.
Qualifying Child or Qualifying Relative: Summary
Differences exist between the two statuses of dependents as determined by the Internal Revenue Service Code for the purposes of deriving benefits on federal tax returns. For example, age is not an issue for a qualifying relative but generally is of concern for a qualifying child. Income restrictions are not imposed for a qualifying child but are issued for qualifying relatives. Knowing the differences between the two statuses insures that taxpayers will have an understanding of tax rules for dependents and thereby will increase their likelihood of claiming all the income and tax reductions for which they are eligible.
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