1. Dependents
Pub 4012 – Tab C
Pub 4491 – Lesson 6 1

2. Personal Exemption Deduction Suspended
Personal exemption amount reduced to $0 for tax years 2018 – 2025
$4,150 exemption amount still in place for qualifying relative gross income test
Reverts to inflation-adjusted amounts in TY 2026 if no changes in the law
Many states retain exemption amounts and terminology
NTTC Training - TY2018 2

3. Dependent Rules Unchanged
Even though no exemption deduction 2018 – 2025, important for:
Deductions
Limited to expenses for taxpayer, spouse and dependents, e.g. medical
Credits
Limited to expenses for taxpayer, spouse and dependents, e.g. education credits
The rules for the child tax credit / additional child tax credit and credit for other dependents limit the credit to certain dependents
Other provisions may have also changed
The basic definition of a dependent has not changed
NTTC Training - TY2018

4. Claiming a Dependent Two types of Dependents Qualifying child
Includes permanently and totally disabled adult
Qualifying relative
Includes qualifying non-relative
NTTC Training - TY2018

5. Claiming a Dependent Taxpayer cannot claim individual as a dependent
If taxpayer/spouse can be claimed as a dependent by another taxpayer
Exception: if other person does not have to file, then taxpayer can claim dependents
Individual must be U.S. citizen or national, U.S. resident alien, or resident of Canada or Mexico
Individual cannot file MFJ
Exception: filing only to receive withholding or estimated payments
There is no exemption deduction
See the Child Tax Credit lesson for the replacement Credit for Other Dependents
NTTC Training - TY2018

6. Qualifying Child Four tests for qualifying child
NTTC Tri-fold
Four tests for qualifying child
Support: child cannot provide over half their own support
Age: under 19 or under 24 and full-time student and younger than taxpayer or spouse
Any age if permanently and totally disabled
Relationship: child, grandchild, brother, sister – descendents thereof and qualified foster child
Residency: child lived in home over 6 months
Stop At Rail Roads
Step- and half- included in relationship
Full-time student defined by institution
Child must be full-time for some part of 5 months during the year
Temporary absences count as time in the home
Students away at school
Medical reasons
Temporary incarceration such as juvenile detention
Temporary job assignment away
Use the Tri-fold in determining dependency
NTTC Training - TY2018

7. Qualifying Relative Four tests for qualifying relative
NTTC Tri-fold
Four tests for qualifying relative
Residency or Relationship
Residency: lived with taxpayer all year
Relationship: same as qualifying child plus – parent, grandparent, aunt or uncle
Not the qualifying child of another taxpayer
Gross income below exemption amount: $4,150 for 2018
Taxpayer provided over half the support of individual
Rachel Needs Good Support
Relationship includes step- and half-, in-laws
Great-grandparents included in relationship
Aunt and uncle do not include great-aunt/uncle
Not the qualifying child test definition of taxpayer: not required to file
If filing, only file to receive withholding/estimated payments
Not filing to receive EIC or other refundable credit
Same temporary absences as prior slide
Income from a sheltered workshop is not included as income or considered "substantial gainful activity”
Use tri-fold to determine dependency
NTTC Training - TY2018

8. Qualifying Child of More than One Person
NTTC Tri-fold
Tiebreaker rules: more than one taxpayer claims a child
Only one the parent, parent wins
Both parents claim child, custodial parent wins
Child in custody of both parents same amount of time, parent with higher AGI wins
None is parent, taxpayer with highest AGI wins
Tiebreaker rules kick in when more than one taxpayer can claim a child
Custodial parent is the parent the child lives with the majority of the time
NTTC Training - TY2018

9. Child of Separated Parents
NTTC Tri-fold
Form 8332 releases exemption to non-custodial parent
Does not allow non-custodial parent to file HoH, claim EIC or claim child / dependent care credit (CDC)
Does allow non-custodial parent to claim Child Tax Credit
Must be signed by custodial parent
Custodial parent may still file HoH, claim EIC or claim CDC
Form 8332 or pre-2009 divorce decree pages can be scanned and attached to return*
* Tax-Aide policy is not to mail Form 8453 – taxpayer should retain in case IRS asks for documents or details
Form 8453 held by taxpayers until requested by IRS
We no longer maintain and mail 8453 with documents attached to IRS
Absent Form 8332 or pre-2009 divorce decree, custodial parent claims child
NTTC Training - TY2018

10. Support Items included in support*
Food, lodging, clothing, education, medical and dental care, recreation, transportation, gifts, necessities
Social Security benefits in child’s name is income provided by child
Welfare benefits considered income provided by parent
* Costs are after reimbursements or tax-free scholarships
NTTC Training - TY2018

11. Multiple Support Form 2120 Multiple Support Declaration required if
Several individuals together provide over 50% support
Considered individuals must provide at least 10% support
Declaration states who may claim dependent
Individuals can vary year to year
Individuals providing at least 10% support decide among themselves who claims the dependent
NTTC Training - TY2018
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12. Dependents
Questions?
Comments?
NTTC Training - TY2018