Question

he taxpayer in every case below is a U.S. citizen and not a dependent. Which of the following individuals meets the dependency tests as a qualifying child of the taxpayer? Laura (19) left home three years ago and moved in with her sister (21), the taxpayer. Laura is a full-time student who paid less than 50% of her own support and earned $15,000. Trinity's mom left Trinity (6) with the taxpayer about two years ago and has not been heard from since. Trinity is not related to the taxpayer. Meanwhile, the taxpayer has been raising Trinity as her own child, she pays for 100% of her support, and no one else lives in their household. The taxpayer's father, Ron (62), was sick, did not have any income, and lived with the taxpayer all year. The taxpayer paid all of Ron's support for the year. Ron's wife (60) works and earned $20,000. They are filing married filing jointly (MFJ). Chance (17) is the taxpayer's stepson. He lived with the taxpayer for five months and moved out with his mom when the taxpayer and Chance's mom got a divorce. The taxpayer contributed over 50% of the support of the household.

Answer 1

The Working Families Tax Relief Act,2004 set a uniform definition for Qualifying Child and this definition applies from beginning of the year 2005. The Definition applies for Head of Household filing Status, the exemption for a dependent, the child tax credit, the child and Dependent care Credit and the earned income tax credit.

In general, a person need to satisfy the following 4 tests in order to qualify as taxpayer's Qualifying Child.

1. Relationship - The Taxpayer's Child or Step child ( Whether by blood or adoption) , foster child, sibling, step - siblings or a descendant of one of these.

2. Residence - should share the same principal residence with the tax payer for more than half of the year,

3. Age - Must be under 19 years of age at the end of the tax year. Incase of full time student for atleast 5 months of the year then  must be under 24 years of age. Or be Permanently or Totally disabled at any time during the year.

4. Support - Did not provide more than half of his/her own support for the year.

1. Laura:

Laura's Sister is the tax payer and Laura is the Qualifying Child because Laura satisfies the above 4 conditions,

She is related to tax payer ( sister). She stays with her taxpayer sister. she is 19 years of age and a full time student and Laura pays less than 50% of her support during the year.

2. Trinity:

Trinity is not qualifying child for the tax payer because she does not satisfy the first condition of relation. Trinity is not related to the tax payer and Trinity's mom left her with the tax payer and did not give her in adoption to the tax payer. so the tax payer cannot claim Trinity as Qualifying Child.

3. Ron:

Ron Cannot be the qualifying Child because he is the father and not the child of the tax payer and his age is not under the age limit of the qualifying child.

But the Tax payer can claim Ron as a Qualifying Dependent as Ron is the Tax payer's Father, Lived with the Tax payer and Ron has no income and the Tax payer has paid full support to the Ron during the year.

4.Chance:

Chance's Step Father Can claim Chance as Qualifying Child because he is stepson, Chance is 17 years of age, they lived together until divorce (exemption is given in case of divorce to more than 6 months of stay rule) and he provided more than 50% of the support to the household but His stepfather Can claim Chance as Qualifying Child if Chance's mom is not claiming him as Qualifying Child. Because Chance Mom and Step Father are divorced and Qualifying Child is given to the custodial Parent.