WHAT IS Member Of Household Test
A Member of Household Test is a test that can be administered to a prospective dependent in lieu of the more commonly known relationship test. If a person does not meet the criteria to be considered a close relative by the IRS, the individual may still qualify as a member of household if they lived as a member of the taxpayer's household for the entire year. Domestic employees, such as maids and babysitters, are excluded from this treatment
BREAKING DOWN Member Of Household Test
A Member of Household Test is one of several tests that may qualify a person to be claimed as a dependent by someone else on their tax return. Though the term is associated with nuclear family members, dependents do not have to be blood relatives, children or spouses.
An individual does not have to be related to you for you to claim them on your taxes, but the individual must have resided with you, the taxpayer, throughout the the year. Both the taxpayer and the prospective dependent can be temporarily absent from the home during the year without jeopardizing the dependency status. This type of absence can be for illness, vacation, education, business, military service or other similar reasons. If a person is born or dies during the year but lived as a member of the household the rest of the year, that person still qualifies as a member of the household.
How do you know if you can claim a person as a dependent on your tax return?
Claiming a dependent on your tax return can greatly lower your taxable income. As of 2017, for every qualified dependent you claim, you reduce your taxable income by $4,050. In order to claim an individual on your tax return you must be the only person claiming them as a dependent and they cannot be a spouse filing a joint tax return. They also must be a citizen of the United States, a U.S. national, a U.S. resident, or a resident of Canada or Mexico.
Once you make sure the person you want to claim meets all those qualifications, the individual must also be either a lineal descendant, a brother or sister including stepbrothers/stepsisters and half-brothers/half-sisters, a lineal ancestor, a niece, nephew, aunt or uncle, or an in-law. If they are not a relative either through blood or marriage, this is when the Member of Household Test comes into play. You can still claim them, but they must live in your home for the entire year. Members of household can also be claimed if they resided at the domicile, but died during the year. Newborns brought home from the hospital may also be claimed as members of household.