Can You Claim Exemption for a Dependent?

Dependency Tests

The following five tests must be met for you to claim an exemption for a dependent.

1. Member of Household or Relationship Test
2. Citizen or Resident Test
3. Joint Return Test
4. Gross Income Test
5. Support Test

To help help you determining whether you can claim an exemption for a dependent, we used the flowchart developed by the IRS for this purpose and enhance it with interactive links to easily navigate the and explain the questions. Please remember that this chart can be used for guidance only.

Exemptions for Dependents

• You are allowed one exemption for each person you can claim as a dependent.
• To claim the exemption for a dependent, the following five tests must be met for you to claim an exemption for a dependent.

Member of Household or Relationship Test

To meet this test, a person must either:

1. Live with you for the entire year as a member of your household, or
2. Be related to you in one of the ways listed under Relatives who do not have to live with you

If at any time during the year the person was your spouse, that person cannot be your dependent.

Citizen or Resident Test

To meet the citizen or resident test, a person must be a U.S. citizen or resident, or a resident of Canada or Mexico, for some part of the calendar year in which your tax year begins

Joint Return Test

Even if the other dependency tests are met, you are generally not allowed an exemption for your dependent if he or she files a joint return

Exception. The joint return test does not apply if a joint return is filed by the dependent and his or her spouse merely as a claim for refund and no tax liability would exist for either spouse on separate returns

Gross Income Test

Generally, you cannot take an exemption for a dependent if that person had gross income of $2,900 or more for 2001. This test does not apply if the person is your child and is either:

1. age 19 at the end of the year, or
2. a student under age 24 at the end of the year.

Support Test

You must provide more than half of a person's total support during the calendar year to meet the support test. However, there are special rules that apply in the following two situations.

1. Two or more persons provide support, but no one person provides more than half of a person's total support. See Multiple Support Agreement, 
2. The person supported is the child of divorced or separated parents (illustrated in figure-B below)

Gross income defined

All income in the form of money, property, and services that is not exempt from tax is gross income. In a manufacturing, merchandising, or mining business, gross income is the total net sales minus the cost of goods sold, plus any miscellaneous income from the business.

Gross receipts from rental property are gross income. Do not deduct taxes, repairs, etc., to determine the gross income from rental property. Gross income includes a partner's share of the gross (not a share of the net) partnership income.

Gross income also includes all unemployment compensation and certain scholarship and fellowship grants. Scholarships received by degree candidates that are used for tuition, fees, supplies, books, and equipment required for particular courses are not included in gross income. For more information, see Publication 520.

Tax-exempt income, such as certain social security payments, is not included in gross income.

Child defined

For purposes of the gross income test, your child is your son, stepson, daughter, stepdaughter, a legally adopted child, or a child who was placed with you by an authorized placement agency for your legal adoption. A foster child who was a member of your household for your entire tax year is also considered your child.

Child under age 19

If your child is under 19 at the end of the year, the gross income test does not apply. Your child can have any amount of income and you can still claim an exemption if the other dependency tests, including the support test, are met.

Student under age 24

The gross income test does not apply if your child is a student who is under age 24 at the end of the calendar year. The other dependency tests must still be met.

Student: To qualify as a student, your child must be, during some part of each of 5 calendar months during the calendar year (not necessarily consecutive):

1. A full-time student (as considered by the school) at a school that has a regular teaching staff, course of study, and regularly enrolled body of students in attendance, or
2. A student taking a full-time, on-farm training course given by a school described in (1) above or a state, county, or local government.

You still Have a question? Get an an answer from a CPA at (972) 644-9990

[ Home ] [ Up ]

Send mail to Webmaster@txcpa.net with questions or comments about this web site.
Copyright © 1998 - 20004 Richard A. Chichakli, P.C. Certified Public Accountants & Information System Auditors
Last modified: February 19, 2007