May 25, 2008

Q & A: Claiming a Child As Qualifying Relative

QUESTION: Does a 20 year old child who has had no income for the year due to some emotional issues, whose parents have supported 100% (shelter, food, clothing, and medical care), but is living in an apartment (again, paid for by parents) qualify as a dependent? Must the child physically live in the same household to qualify? Thank you!

ANSWER: According to the IRS Code Sec. 152(d), the child qualifies to be claimed as a dependent by the parents. A "qualifying relative" is defined by satisfying the following four tests:
1) the individual must be a relative by blood or by marriage, or an individual that for the tax year has the same principal place of abode as the taxpayer and is a member of the taxpayer's household.
2) the individual must have less than $3,400 in gross income for the calendar year ($3,500 in 2008)
3) over 50% of the individuals total financial support for the calendar year must have been furnished by the taxpayer
4) the individual can not be a qualifying child of any taxpayer for the tax year (as defined by the qualifying child dependency rules)
Be aware that there appear to be "fine lines" here regarding whether or not dependents can be claimed. We suggest you consult your professional tax advisor or visit the IRS web site at http://www.irs.gov for greater clarification.

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