Yes. Could be as helpful as a son/daughter as long as your niece lived with you for some time between January and July. If not, you may be able to claim her as a "Qualifying Relative" (see different rules below).
A "Qualifying Child" may include your child or stepchild, foster child, sibling or step-sibling, or descendants of any of these, such as your niece.
For 2017, you can claim a $4,050 exemption for each qualifying child. To qualify for the exemption, the child must live with you more than half of the year and be under 19 at the end of the year, or under 24 and a full-time student for the year (defined as attending school for at least part of five calendar months during the year).
You no longer have to show that you provide more than half of the child's support, as was required under the rules in effect a few years ago. However, to claim an exemption the child cannot provide more than half of his or her own support.
There is no gross income test for a qualifying child. That means you can claim an exemption even if the child has a fair amount of income, as long as the child doesn’t provide over half of his or her own support, as outlined above.
Qualifying Relative
- Do they live with you? Your relative must live at your residence all year or be on the list of “relatives who do not live with you” in Publication 501. About 30 types of relatives are on this list.
- Do they make less than $4,050? Your relative cannot have a gross income of more than $4,050 and be claimed by you as a dependent.
- Do you financially support them? You must provide more than half of your relative’s total support each year.
- Are they a citizen or resident? The person must be a U.S. citizen, a U.S. national, a U.S. resident, or a resident of Canada or Mexico. Many people wonder if they can claim a foreign-exchange student who temporarily lives with them. The answer is maybe, but only if they meet this requirement.
- Are you the only person claiming them as a dependent? You can’t claim someone who takes a personal exemption for himself or claims another dependent on his own tax form.
- Are they filing a joint return? You cannot claim someone who is married and files a joint tax return. Say you support your married teen-aged son: If he files a joint return with his spouse, you can’t claim him as a dependent.
