| Other than fitting the description of a constant liability, | | | | expenses, earned income credit, and any associated |
| what other qualifying attributes must one have, to be | | | | itemized deductions may be claimed if the qualifying |
| classed as a dependent, and how do you determine | | | | individual is determined eligible. |
| this for tax purposes? The following paragraphs | | | | Determining eligibility in many cases means the |
| explain the qualifying tests for determining dependency | | | | difference between owing tax on your return, and the |
| as it relates to your tax status, liability and available | | | | eligibility to file as head of household, and receive a |
| credits. First, we need to make you aware that there | | | | refund that would include earned income credit. The |
| are two different types of dependents. | | | | earned income tax credit is a negative tax, and an |
| There are several "qualifying tests" an individual must | | | | attempt by the government to provide lower and |
| pass, in order to be qualified as a dependent on a US | | | | poverty level income families with the opportunity to |
| 1040 tax return. The tests for dependency are | | | | receive much needed assistance with caring for and |
| centered around the actual support tests that the | | | | supporting their families. Today, however, the earned |
| candidate must pass; first, the qualifying individual must | | | | income credit is becoming an opportunity for some |
| be the taxpayer's child, stepchild, foster child, sibling or | | | | segments of the public to abuse the goodwill of their |
| stepsibling, or a descendent of one of these (such as | | | | government and falsify claims of dependency |
| a niece or nephew), second the qualifying individual | | | | qualifications. |
| must have the same principal residence as the | | | | The child and dependent care expenses cover things |
| taxpayer for more than half the year and there are | | | | like daycare, after school care programs, and any |
| exceptions for children of divorced parents, kidnapped | | | | other form of paid care that is necessary for the |
| children, and for children who were born or died during | | | | qualifying individual to receive while the taxpayer is |
| the year, third the qualifying individual must be under the | | | | away at work. The only thing to watch here is that all |
| age of 19, or 24 if a full-time student and fourth, the | | | | qualifying individuals for the child and dependent care |
| qualifying individual must not have provided for more | | | | expenses must be under the age of 13. |
| than one-half of their own support during the year. | | | | The child tax credit is comparable to the earned |
| There are some additional rules that a dependent must | | | | income credit, in that it is a straight credit, dollar for |
| pass, that really have nothing to do with the amount of | | | | dollar deduction of your tax liability. The child tax credit |
| support provided, but do determine their eligibility as US | | | | may only be taken by individuals with a qualifying |
| citizens and the ability to be considered for | | | | dependent that is under the age of 17. |
| dependency. First, the qualifying individual must be a US | | | | As you undertake the task of determining if your |
| citizen or national, and their marital status must be | | | | dependent meets the qualifying tests, and can actually |
| single, unless the are married but did not file a joint | | | | provide some benefit in tax reduction at the end of the |
| return for that year, or there was no tax liability that | | | | year, remember that it may take a little work, but the |
| existed for either spouse had they filed separately. | | | | potential payoff could be well worth the time it takes |
| If the qualifying individual can pass all four of the above | | | | to determine if you are single with no dependents, or |
| described qualifying tests, as well as the additional | | | | head of household with a dependent and the |
| rules, then any of the deductions, exemptions, and | | | | opportunity to claim earned income credit, child care |
| credits that are available can be used. For instance, | | | | expense deductions, as well as file for the child tax |
| child care expenses, child tax credits, dependent care | | | | credit. The result could be amazing! |