Who you can claim as your dependent?

Claiming a dependent gives you a valuable tax break in dependency exemption, which works just like a tax deduction. The exemption amount for each dependent is $4,000 for year 2015. It is adjusted each year for inflation, and is also subject to phase-out for high income taxpayers. Claiming a dependent can also qualifies you for Head of household filing status, and gives you a lot of tax credits, such as child credit, earned income credit, etc.

To determine who qualifies as a dependent can be difficult to certain family situations, such as when you have a child off at college, or a child with a part-time job. However, the basic rule is not complicated. Basically, there are two types of dependents Qualifying Child and Qualifying Relatives, which are subject to different rules.

Qualifying Child

Generally, you can claim your child as your dependent, if he is your qualifying child, who lives with you more than half of the year, and he does not provide half of his own support, and he is under 19 at the end of the year, or under 24 and a full-time student for the year.

Qualifying Relatives

If your child is not your qualifying child because he is over 24 year old or not living with you, you may still claim the child as your dependent if he is your qualified relative. To qualify as a  qualified relative, you need to provide your child over half of his support and his gross income has to be under $4,000.

You can also claim your aging parents or close relatives if they are your qualifying relatives. You must provide more than half of their total support each year and their gross income cannot be over $4,000 per year.

A person who is not related to you can also be your qualifying relative if he/she lives at your residence all year, and you provide more than half of the support and their gross income is less than $4,000 and no one else can claim them.

As long as you know how to apply the above rules, it is not so hard to determine who qualifies as your dependent. Then, you can enjoy all the tax benefits from your qualified dependents.