* As of 1/1/2018 there are no longer exemptions with TCJA
The first rule is that if she qualifies to be your dependent, she is not allowed to take her own exemption, even if you chose not to claim her. The exemption amount is $4050 and it reduces the amount of income either of you would pay tax on. The higher the tax bracket, the more the savings.
If she is in college and qualifies for an Education Credit, then it would belong to you if you claim her. See the rules for the two types of dependents below.
Qualifying Child
Relationship — the taxpayer’s child or stepchild (whether by blood or adoption), foster child, sibling or step-sibling, or a descendant of one of these.
Residence — has the same principal residence as the taxpayer for more than half the tax year. Exceptions apply, in certain cases, for children of divorced or separated parents, kidnapped children, temporary absences, and for children who were born or died during the year.
Age — must be under the age of 19 at the end of the tax year, or under the age of 24 if a full-time student for at least five months of the year, or be permanently and totally disabled at any time during the year.
Support — did not provide more than one-half of his/her own support for the year.
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.
