Once upon a time, this comment would have been some what true. However, if audited by the IRS, which they’ve been getting everyone in recent years... Last year, this year, and if they haven’t yet, next year or the following. The tax law in claiming dependents only permits a tax payer to claim “qualifying” dependents that are related either by blood or by law. If audited (and they are on the prowl) they will remove the tax credits from the refund, deposit it, and send the filer a letter stating their adjustments and request documents to verify with proof that they can claim those dependents for tax credits. They will require proof
1. Residency - Child lived with tax payer for more than 6 months out of the filing year. Sharing same address, with verifiable proof of address.
2.) The filer supported their dependents and paid for more than half of their support and household bills, upkeep, utilities food, etc... (paying child support does not qualify for this tax credit) But supposing documents are required.
3.) Dependent must be related to tax filer. They can be a dependent which is biological child, step child, brother, sister half or step, or a decent of any. Or a OTHER qualifying dependent, which is: Child of filer, 18-24, must be a full time student and you pay more than half of their financial support. This OTHER qualifying dependent can reside away from home, at college etc. More on OTHER qualifying dependent, any age (18+) with disabilities. Also a parent or grandparent of filer, can be yours OTHER qualifying dependent.
OTHER qualifying dependent can be claimed for up to $500 refundable tax credits. And allow your filing status to claim HEAD OF HOUSEHOLD, as will the qualifying dependents, which can reduce your tax obligation by $2000, and $1,400 of those credits are refundable.
If audited the IRS requires legal documents for verification. Birth certificates, marriage certificates, of all parties in question. They expect to verify each name on birth certificates match the filer and all defendants to coin-sigh.
- Prior to the new TCJA tax law that became law in Dec 2017. The individual tax credit was eliminated, which amended the ability for a filer to qualify for the individual credit of $4050 and to itemize their tax claims. This changed the dependent qualifications and other credits that filers were use to claiming.
I and many people I know learned this the hard way, and the IRS has been closely monitoring exactly this. A lot of people are waiting on their refunds this year, for reasons such as this. There are many filers from last year, who had the same issue. And they IRS has a huge web page or EITC and dependent claims, audits, and software they’re using in order to catch these errors. This will be on their radar until 2025 (or 2026, I can’t remember) when the tax law returns to its previous form.
Hope this answers your question. Thanks
