If my daughter works for a non profit org, and made less than $10,000 in 2016, can I claim her on my taxes?

[CherylW · Accepted solution]

Here's a great interactive tool to help you figure out whether you can take her as a dependent: 

IRS Dependency Questions 

[Carl]

How old was your daughter on Dec 31 of the tax year? Was she a full time student for any one semester during the tax year? That matters big time.

[Hal_Al]

There are two types of dependents, "Qualifying Children"(QC) and standard ("Qualifying Relative" in IRS parlance even though they don't have to actually be related). There is no income limit for a QC but there is an age limit, a relationship test and a residence test. Only a QC qualifies a taxpayer for the Earned Income Credit.

A child of a taxpayer can still be a “Qualifying Child” (QC) dependent, regardless of his/her income, if:

1. He is under age 19, or under 24 if a full time student for at least 5 months of the year, or is totally & permanently disabled
2. He did not provide more than 1/2 his own support. Scholarships are considered third party support and not as support provided by the student.
3. He lived with the parent (including temporary absences such as away at school) for more than half the year

So, it doesn't matter how much he earned. What matters is how much he spent on support. Money he put into savings does not count as support he spent on him self.

The support value of the home, provided by the parent, is the fair market rental value of the home plus utilities & other expenses divided by the number of occupants.

If your daughter does not meet the QC rules, then her income is too high (more than $4150) to be a standard dependent (qualifying relative). The fact that her income is from a non-profit org, does not change that.