Dependent

What is a 'Dependent'

A dependent is an individual whom a taxpayer can claim for credits and/or exemptions. A dependent is an individual, such as a qualifying child, whom a taxpayer can claim on his or her federal and some state income tax returns. Taxpayers can reduce their taxable income by claiming deductions, which can result in a decrease in tax liabilities and an increase in the amount of a refund. Taxpayers are permitted one exemption for each person that can be claimed as a dependent. If the taxpayer's adjusted gross income falls above a certain amount as determined by the Internal Revenue Service (IRS), the dollar amount of the exemptions may be reduced.

BREAKING DOWN 'Dependent'

In general, a taxpayer can claim a dependent if the person is a qualifying child or a qualifying relative. To claim a child as a dependent, for example, the child must be the taxpayer's child, stepchild, foster child, sibling, stepsibling or a descendant of one of these individuals. In addition, the child must have the same principal residence as the taxpayer for at least half of the year for which the child will be claimed as a dependent. The child must be under age 19 at the end of the tax year (December 31) or under age 24 if he or she is a full-time student for at least five months during that year, or if the child is permanently and totally disabled at any point during the year. A dependent can be claimed on only one person's income tax return, and returns will be audited where two or more taxpayers claim the same dependent.

RELATED TERMS
  1. Child Tax Credit

    A credit given to taxpayers for each dependent child that is ...
  2. IRS Publication 972: Child Tax ...

    A document published by the Internal Revenue Service (IRS) that ...
  3. Additional Child Tax Credit

    A refundable credit that can be claimed by taxpayers who are ...
  4. Qualifying Relative

    A federal income tax designation that allows a taxpayer to claim ...
  5. Child And Dependent Care Credit

    A non-refundable tax credit for unreimbursed childcare expenses ...
  6. Relationship Test

    One of several tests that a person must pass in order to be claimed ...
Related Articles
  1. Personal Finance

    What's IRS Form 1040 For?

    Most U.S. taxpayers will be familiar with the 1040. By the end of filling it out, you'll know how much tax you owe, or what your refund is.
  2. Personal Finance

    Teaching Your Child To Be Financially Savvy

    If you start today, you can set your kids up for a lifetime of smart money management.
  3. Personal Finance

    Are You Missing Out On These Tax Exemptions?

    To lower your tax bill, make sure that you're taking all the exemptions that apply to you.
  4. Personal Finance

    The 5 Most Expensive States for Child Care

    To get a better sense of how child care costs can fluctuate, here's a look at the costs of child care across the country.
  5. Investing

    Opening Your Child's First Bank Account

    Teach your children to save up to meet their spending - and saving - goals.
  6. Personal Finance

    This Explains $0 Federal Income Tax for Millions

    Understand how the earned income tax credit works and whether it applies to you.
  7. Personal Finance

    How To Get The Most Money Back On Your Tax Return

    Many people pay more taxes than they have to simply because they don’t know better. Here are a few suggestions for getting the most out of your tax return.
  8. Personal Finance

    How An Allowance Helps Kids Get Money-Smart

    Discover which of these three reward techniques teaches the best lessons about money.
  9. Personal Finance

    Before You Buy a Home for Your Child: Read This

    It is certainly generous. It can even be advantageous to both of you. But beware of the pitfalls.
  10. Financial Advisor

    Tax Time is Coming; Don't Be Caught Off Guard

    It's time to think about tax returns again. The good news is that the regulations in 2016 have not changed dramatically from last year.
RELATED FAQS
  1. How much does a dependent reduce your taxes?

    Learn the qualifications for claiming a dependent on your income taxes and the amount by which a dependent reduces your tax ... Read Answer >>
  2. How can I use a child tax credit?

    You may be able to reduce the amount of taxes you owe by up to $4,000, by claiming the child tax credit of up to $1,000 for ... Read Answer >>
  3. Do I have to pay taxes at age 66?

    I recently turned 66. I'm retired and I make $1,100/month from retirement. I'm also a taxi dri... Read Answer >>
  4. What is the difference between a write-off and a deduction?

    Understand the differences between a tax write-off and a tax deduction. Learn how each one works to reduce income taxes and ... Read Answer >>
  5. Can my child have an IRA/Roth IRA?

    Explore the possibilities for establishing a traditional or Roth IRA for a minor child, and learn the necessary requirements, ... Read Answer >>
  6. How do I know whether to itemize deductions or take the standard deduction?

    Taking the standard deduction is the easiest and most common method chosen by filers, but many taxpayers may wind up paying ... Read Answer >>
Trading Center