Table of Contents
Exemption amount. The amount you can deduct for each exemption has increased from $3,300 in 2006 to $3,400 in 2007.
Exemption phaseout. You lose part of the benefit of your exemptions if your adjusted gross income is above a certain amount. For 2007, this phaseout begins at $117,300 for married persons filing separately; $156,400 for single individuals; $195,500 for heads of household; and $234,600 for married persons filing jointly or qualifying widow(er)s. However, in 2007, you can lose no more than of the amount of your exemptions. In other words, each exemption cannot be reduced to less than $1,133.
This chapter discusses exemptions. The following topics will be explained.
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Personal exemptions — You generally can take one for yourself and, if you are married, one for your spouse.
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Exemptions for dependents — You generally can take an exemption for each of your dependents. A dependent is your qualifying child or qualifying relative. If you are entitled to claim an exemption for a dependent, that dependent cannot claim a personal exemption on his or her own tax return.
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Phaseout of exemptions — You get less of a deduction when your adjusted gross income goes above a certain amount.
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Social security number (SSN) requirement for dependents — You must list the social security number of any dependent for whom you claim an exemption.
Publication
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501 Exemptions, Standard Deduction, and Filing Information
Form (and Instructions)
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2120 Multiple Support Declaration
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8332 Release of Claim to Exemption for Child of Divorced or Separated Parents
There are two types of exemptions: personal exemptions and exemptions for dependents. While each is worth the same amount ($3,400 for 2007), different rules apply to each type.
You are generally allowed one exemption for yourself and, if you are married, one exemption for your spouse. These are called personal exemptions.
You can take one exemption for yourself unless you can be claimed as a dependent by another taxpayer. If another taxpayer is entitled to claim you as a dependent, you cannot take an exemption for yourself even if the other taxpayer does not actually claim you as a dependent.
Your spouse is never considered your dependent.
You are allowed one exemption for each person you can claim as a dependent. You can claim an exemption for a dependent even if your dependent files a return.
The term “dependent” means:
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A qualifying child, or
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A qualifying relative.
The terms “qualifying child” and “qualifying relative” are defined later.
You can claim an exemption for a qualifying child or qualifying relative only if these three tests are met.
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Dependent taxpayer test.
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Joint return test.
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Citizen or resident test.
These three tests are explained in detail later.
All the requirements for claiming an exemption for a dependent are summarized in Table 3-1.
Dependent not allowed a personal exemption. If you can claim an exemption for your dependent, the dependent cannot claim his or her own exemption on his or her own tax return. This is true even if you do not claim the dependent's exemption on your return or if the exemption will be reduced under the phaseout rule described under Phaseout of Exemptions, later.
If you could be claimed as a dependent by another person, you cannot claim anyone else as a dependent. Even if you have a qualifying child or qualifying relative, you cannot claim that person as a dependent.
If you are filing a joint return and your spouse could be claimed as a dependent by someone else, you and your spouse cannot claim any dependents on your joint return.
You generally cannot claim a married person as a dependent if he or she files a joint return.
Example.
You supported your 18-year-old daughter, and she lived with you all year while her husband was in the Armed Forces. The couple files a joint return. Even though your daughter is your qualifying child, you cannot take an exemption for her.
Example.
Your son and his wife each had less than $3,000 of wages and no unearned income. Neither is required to file a tax return. Taxes were taken out of their pay, so they filed a joint return to get a refund. The exception to the joint return test applies, so you are not disqualified from claiming their exemptions just because they filed a joint return. You can claim their exemptions if you meet all the other requirements to do so.
You cannot claim a person as a dependent unless that person is a U.S. citizen, U.S. resident alien, U.S. national, or a resident of Canada or Mexico, for some part of the year. However, there is an exception for certain adopted children, as explained next.
There are five tests that must be met for a child to be your qualifying child. The five tests are:
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Relationship,
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Age,
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Residency,
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Support, and
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Special test for qualifying child of more than one person.
These tests are explained next.
To meet this test, a child must be:
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Your son, daughter, stepchild, foster child, or a descendant (for example, your grandchild) of any of them, or
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Your brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant (for example, your niece or nephew) of any of them.
Table 3-1. Overview of the Rules for Claiming an Exemption for a Dependent
Caution. This table is only an overview of the rules. For details, see the rest of this chapter.
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Tests To Be a Qualifying Child | Tests To Be a Qualifying Relative |
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1There is an exception for certain adopted children. | |
2There are exceptions for temporary absences, children who were born or died during the year, children of divorced or separated parents, and | |
kidnapped children. | |
3There is an exception if the person is disabled and has income from a sheltered workshop. | |
4There are exceptions for multiple support agreements, children of divorced or separated parents, and kidnapped children. |
To meet this test, a child must be:
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Under age 19 at the end of the year,
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A full-time student under age 24 at the end of the year, or
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Permanently and totally disabled at any time during the year, regardless of age.
Example.
Your son turned 19 on December 10. Unless he was disabled or a full-time student, he does not meet the age test because, at the end of the year, he was not under age 19.
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A full-time student at a school that has a regular teaching staff, course of study, and a regularly enrolled student body at the school, or
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A student taking a full-time, on-farm training course given by a school described in (1), or by a state, county, or local government agency.
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He or she cannot engage in any substantial gainful activity because of a physical or mental condition.
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A doctor determines the condition has lasted or can be expected to last continuously for at least a year or can lead to death.
To meet this test, your child must have lived with you for more than half of the year. There are exceptions for temporary absences, children who were born or died during the year, kidnapped children, and children of divorced or separated parents.
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Illness,
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Education,
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Business,
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Vacation, or
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Military service.
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The child is presumed by law enforcement authorities to have been kidnapped by someone who is not a member of your family or the child's family.
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In the year the kidnapping occurred, the child lived with you for more than half of the part of the year before the date of the kidnapping.
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The year there is a determination that the child is dead, or
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The year the child would have reached age 18.
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The parents:
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Are divorced or legally separated under a decree of divorce or separate maintenance,
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Are separated under a written separation agreement, or
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Lived apart at all times during the last 6 months of the year.
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The child received over half of his or her support for the year from the parents.
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The child is in the custody of one or both parents for more than half of the year.
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Either of the following statements is true.
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The custodial parent signs a written declaration, discussed later, that he or she will not claim the child as a dependent for the year, and the noncustodial parent attaches this written declaration to his or her return. (If the decree or agreement went into effect after 1984, see Divorce decree or separation agreement made after 1984, later.)
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A pre-1985 decree of divorce or separate maintenance or written separation agreement that applies to 2007 states that the noncustodial parent can claim the child as a dependent, the decree or agreement was not changed after 1984 to say the noncustodial parent cannot claim the child as a dependent, and the noncustodial parent provides at least $600 for the child's support during the year.
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The noncustodial parent can claim the child as a dependent without regard to any condition, such as payment of support.
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The custodial parent will not claim the child as a dependent for the year.
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The years for which the noncustodial parent, rather than the custodial parent, can claim the child as a dependent.
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The cover page (write the other parent's social security number on this page).
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The pages that include all of the information identified in items (1) through (3) above.
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The signature page with the other parent's signature and the date of the agreement.
To meet this test, the child cannot have provided more than half of his or her own support for the year.
This test is different from the support test to be a qualifying relative, which is described later. However, to see what is or is not support, see Support Test (To Be a Qualifying Relative) , later. If you are not sure whether a child provided more than half of his or her own support, you may find Worksheet 3-1 helpful.
If your qualifying child is not a qualifying child for anyone else, this test does not apply to you and you do not need to read about it. This is also true if your qualifying child is not a qualifying child for anyone else except your spouse with whom you file a joint return.
If a child is treated as the qualifying child of the noncustodial parent under the rules for children of divorced or separated parents described earlier, see Applying this special test to divorced or separated parents, later.
Sometimes, a child meets the relationship, age, residency, and support tests to be a qualifying child of more than one person. Although the child is a qualifying child of each of these persons, only one person can actually treat the child as a qualifying child. To meet this special test, you must be the person who can treat the child as a qualifying child.
If you and another person have the same qualifying child, you and the other person(s) can decide which of you will treat the child as a qualifying child. That person can take all of the following tax benefits (provided the person is eligible for each benefit) based on the qualifying child.
The other person cannot take any of these benefits based on this qualifying child. In other words, you and the other person cannot agree to divide these tax benefits between you.
If you and the other person(s) cannot agree on who will claim the child and more than one person files a return claiming the same child, the IRS will disallow all but one of the claims using the tie-breaker rule in Table 3-2.
Table 3-2.When More Than One Person Files a Return Claiming the Same Qualifying Child (Tie-Breaker Rule)
Caution. If a child is treated as the qualifying child of the noncustodial parent under the rules for children of divorced or separated parents, see Applying this special test to divorced or separated parents.
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IF more than one person files a return claiming the same qualifying child and . . . | THEN the child will be treated as the qualifying child of the. . . | |||
only one of the persons is the child's parent, | parent. | |||
two of the persons are parents of the child and they do not file a joint return together, | parent with whom the child lived for the longer period of time during the year. | |||
two of the persons are parents of the child, they do not file a joint return together, and the child lived with each parent the same amount of time during the year, | parent with the higher adjusted gross income (AGI). | |||
none of the persons are the child's parent, | person with the highest AGI. |
Example 1—child lived with parent and grandparent.
You and your 3-year-old daughter, Jane, lived with your mother all year. You are 25 years old and earned $9,000 for the year. Your mother is not your dependent. Jane is a qualifying child of both you and your mother because she meets the relationship, age, residency, and support tests for both you and your mother. However, only one of you can claim her. You agree to let your mother claim Jane. This means your mother can claim Jane as a dependent and can claim her as a qualifying child for the child tax credit, head of household filing status, credit for child and dependent care expenses, exclusion for dependent care benefits, and the earned income credit, if she qualifies for each of those tax benefits (and if you do not claim Jane as a dependent or as a qualifying child for any of those tax benefits).
Example 2—two persons claim same child.
The facts are the same as in Example 1 except that you and your mother both claim Jane as a dependent and claim her as a qualifying child for the child tax credit and earned income credit. In this case, you as the child's parent will be the only one allowed to claim Jane as a dependent and claim her as a qualifying child for the child tax credit and earned income credit. The IRS will disallow your mother's claim to these tax benefits unless she has another qualifying child.
Example 3—qualifying children split between two persons.
The facts are the same as in Example 1 except that you also have two other young children who are qualifying children of both you and your mother. Only one of you can claim each child as a dependent. However, you and your mother can split the three qualifying children between you. For example, you can claim one child as a dependent and your mother can claim the other two.
Example 4—taxpayer who is a qualifying child.
The facts are the same as in Example 1 except that you are only 18 years old and did not provide more than half of your own support for the year. This means you are your mother's qualifying child and she could claim you as a dependent. Because of the Dependent Taxpayer Test explained earlier, you cannot treat your daughter as a qualifying child and cannot claim her as a dependent. Only your mother can treat your daughter as a qualifying child.
Example 5—separated parents.
You, your husband, and your 10-year-old son lived together until August 1, 2007, when your husband moved out of the household. In August and September, your son lived with you. For the rest of the year, your son lived with your husband. Your son is a qualifying child of both you and your husband because your son lived with each of you for more than half the year and because he met the relationship, age, and support tests for both of you. At the end of the year, you and your husband still were not divorced, legally separated, or separated under a written separation agreement, so the special rule for divorced or separated parents does not apply.
You and your husband will file separate returns. Your husband agrees to let you treat your son as a qualifying child. This means, if your husband does not claim your son as a qualifying child, you can claim your son as a dependent and treat him as a qualifying child for the child tax credit and exclusion for dependent care benefits, if you qualify for each of those tax benefits. However, you cannot claim head of household filing status because you and your husband did not live apart the last 6 months of the year. As a result, your filing status is married filing separately, so you cannot claim the earned income credit or the credit for child and dependent care expenses.
Example 6—separated parents claim same child.
The facts are the same as in Example 5 except that you and your husband both claim your son as a qualifying child. In this case, only your husband will be allowed to treat your son as a qualifying child. This is because, during 2007, the boy lived with him longer than with you. If you claimed an exemption, the child tax credit, head of household filing status, credit for child and dependent care expenses, exclusion for dependent care benefits, or the earned income credit for your son, the IRS will disallow your claim to all these tax benefits. In addition, because you and your husband did not live apart the last 6 months of the year, your husband cannot claim head of household filing status. As a result, his filing status is married filing separately, so he cannot claim the earned income credit or the credit for child and dependent care expenses
Example 7—unmarried parents.
You, your 5-year-old son, and your son's father lived together all year. You and your son's father are not married. Your son is a qualifying child of both you and his father because he meets the relationship, age, residency, and support tests for both you and his father. Your adjusted gross income (AGI) is $12,000 and your son's father's AGI is $14,000. Your son's father agrees to let you treat the child as a qualifying child. This means you can claim him as a dependent and treat him as a qualifying child for the child tax credit, head of household filing status, credit for child and dependent care expenses, exclusion for dependent care benefits, and the earned income credit, if you qualify for each of those tax benefits (and if your son's father does not claim your son as a dependent or as a qualifying child for any of those tax benefits).
Example 8—unmarried parents claim same child.
The facts are the same as in Example 7 except that you and your son's father both claim your son as a qualifying child. In this case, only your son's father will be allowed to treat your son as a qualifying child. This is because his AGI, $14,000, is more than your AGI, $12,000. If you claimed an exemption, the child tax credit, head of household filing status, credit for child and dependent care expenses, exclusion for dependent care benefits, or the earned income credit for your son, the IRS will disallow your claim to all these tax benefits.
Example 9—child did not live with a parent.
You and your 7-year-old niece, your sister's child, lived with your mother all year. You are 25 years old, and your AGI is $9,300. Your mother's AGI is $15,000. Your niece is a qualifying child of both you and your mother because she meets the relationship, age, residency, and support tests for both you and your mother. However, only one of you can treat her as a qualifying child. Your mother agrees to let you treat the child as a qualifying child.
Example 10—child did not live with a parent.
The facts are the same as in Example 9 except that you and your mother both claim your niece as a qualifying child. In this case, only your mother will be allowed to treat your niece as a qualifying child. This is because your mother's AGI, $15,000, is more than your AGI, $9,300. If you claimed an exemption, the child tax credit, head of household filing status, credit for child and dependent care expenses, exclusion for dependent care benefits, or the earned income credit for your niece, the IRS will disallow your claim to all these tax benefits.
Example 1.
You and your 5-year-old son lived all year with your mother, who paid the entire cost of keeping up the home. Under the rules for children of divorced or separated parents, your son is the qualifying child of your ex-husband, who can claim an exemption and the child tax credit for the child if he meets all the requirements to do so. Because of this, you cannot claim an exemption or the child tax credit for your son. However, your ex-husband cannot claim the boy as a qualifying child for head of household filing status, the credit for child and dependent care expenses, the exclusion for dependent care benefits, and the earned income credit. You and your mother did not have any child care expenses or dependent care benefits, but the boy is a qualifying child of both you and your mother for head of household filing status and the earned income credit because he meets the relationship, age, residency, and support tests for both you and your mother. (Note: The support test does not apply for the earned income credit.) However, you agree to let your mother claim your son. This means she can claim him for head of household filing status and the earned income credit if she qualifies for each and if you do not claim him as a child for the earned income credit. (You cannot claim head of household filing status because your mother paid the entire cost of keeping up the home.)
Example 2.
The facts are the same as in Example 1 except that you and your mother both claim your son as a qualifying child for the earned income credit. Your mother also claims him as a qualifying child for head of household filing status. You as the child's parent will be the only one allowed to claim your son as a qualifying child for the earned income credit. The IRS will disallow your mother's claim to the earned income credit and head of household filing status unless she has another qualifying child.
There are four tests that must be met for a person to be your qualifying relative. The four tests are:
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Not a qualifying child test,
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Member of household or relationship test,
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Gross income test, and
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Support test.
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The child is presumed by law enforcement authorities to have been kidnapped by someone who is not a member of your family or the child's family.
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In the year the kidnapping occurred, the child met the tests to be your qualifying relative for the part of the year before the date of the kidnapping.
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The year there is a determination that the child is dead, or
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The year the child would have reached age 18.
A child is not your qualifying relative if the child is your qualifying child or the qualifying child of any other taxpayer.
Example 1.
Your 22-year-old daughter, who is a full-time student, lives with you and meets all the tests to be your qualifying child. She is not your qualifying relative.
Example 2.
Your 2-year-old son lives with your parents and meets all the tests to be their qualifying child. He is not your qualifying relative.
Example 3.
Your son lives with you but is not your qualifying child because he is 30 years old and does not meet the age test. He may be your qualifying relative if the gross income test and the support test are met.
Example 4.
Your 13-year-old grandson lived with his mother for 3 months, with his uncle for 4 months, and with you for 5 months during the year. He is not your qualifying child because he does not meet the residency test. He may be your qualifying relative if the gross income test and the support test are met.
Example.
You provide all the support of your children, ages 6, 8, and 12, who live in Mexico with your mother and have no income. You are single and live in the United States. Your mother is not a U.S. citizen and has no U.S. income, so she is not a “taxpayer.” Your children are not your qualifying children because they do not meet the residency test. Also, they are not the qualifying children of any other taxpayer, so they are your qualifying relatives and you can claim them as dependents if all the tests are met. You may also be able to claim your mother as a dependent if all the tests are met, including the gross income test and the support test.
To meet this test, a person must either:
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Live with you all year as a member of your household, or
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Be related to you in one of the ways listed under Relatives who do not have to live with you.
If at any time during the year the person was your spouse, that person cannot be your qualifying relative. However, see Personal Exemptions , earlier.
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Your child, stepchild, foster child, or a descendant of any of them (for example, your grandchild). (A legally adopted child is considered your child.)
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Your brother, sister, half brother, half sister, stepbrother, or stepsister.
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Your father, mother, grandparent, or other direct ancestor, but not foster parent.
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Your stepfather or stepmother.
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A son or daughter of your brother or sister.
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A brother or sister of your father or mother.
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Your son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law.
Example.
You and your wife began supporting your wife's father, a widower, in 2001. Your wife died in 2006. In spite of your wife's death, your father-in-law continues to meet this test, and you can claim him as a dependent if all other tests are met, including the gross income test and support test.
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Illness,
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Education,
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Business,
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Vacation, or
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Military service.
To meet this test, a person's gross income for the year must be less than $3,400.
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Provides special instruction or training designed to alleviate the disability of the individual, and
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Is operated by certain tax-exempt organizations, or by a state, a U.S. possession, a political subdivision of a state or possession, the United States, or the District of Columbia.
“Permanently and totally disabled” has the same meaning here as under Qualifying child , earlier.
To meet this test, you generally must provide more than half of a person's total support during the calendar year.
However, if two or more persons provide support, but no one person provides more than half of a person's total support, see Multiple Support Agreement , later.
Example.
Your mother received $2,400 in social security benefits and $300 in interest. She paid $2,000 for lodging and $400 for recreation. She put $300 in a savings account.
Even though your mother received a total of $2,700 ($2,400 + $300), she spent only $2,400 ($2,000 + $400) for her own support. If you spent more than $2,400 for her support and no other support was received, you have provided more than half of her support.
Example.
You are in the Armed Forces. You authorize an allotment for your widowed mother that she uses to support herself and her sister. If the allotment provides more than half of each person's support, you can take an exemption for each of them, if they otherwise qualify, even though you authorize the allotment only for your mother.
Example 1.
You provide $4,000 toward your mother's support during the year. She has earned income of $600, nontaxable social security benefits of $4,800, and tax-exempt interest of $200. She uses all these for her support. You cannot claim an exemption for your mother because the $4,000 you provide is not more than half of her total support of $9,600.
Example.
Lauren, a foster child, lived with Mr. and Mrs. Smith for the last 3 months of the year. The Smiths cared for Lauren because they wanted to adopt her (although she had not been placed with them for adoption). They did not care for her as a trade or business or to benefit the agency that placed her in their home. The Smiths' unreimbursed expenses are not deductible as charitable contributions but are considered support they provided for Lauren.
To figure if you provided more than half of a person's support, you must first determine the total support provided for that person. Total support includes amounts spent to provide food, lodging, clothing, education, medical and dental care, recreation, transportation, and similar necessities.
Generally, the amount of an item of support is the amount of the expense incurred in providing that item. For lodging, the amount of support is the fair rental value of the lodging.
Expenses that are not directly related to any one member of a household, such as the cost of food for the household, must be divided among the members of the household.
Example 1.
Grace Brown, mother of Mary Miller, lives with Frank and Mary Miller and their two children. Grace gets social security benefits of $2,400, which she spends for clothing, transportation, and recreation. Grace has no other income. Frank and Mary's total food expense for the household is $5,200. They pay Grace's medical and drug expenses of $1,200. The fair rental value of the lodging provided for Grace is $1,800 a year, based on the cost of similar rooming facilities. Figure Grace's total support as follows:
Fair rental value of lodging | $ 1,800 | |
Clothing, transportation, and recreation | 2,400 | |
Medical expenses | 1,200 | |
Share of food (1/5 of $5,200) | 1,040 | |
Total support | $6,440 |
The support Frank and Mary provide ($1,800 lodging + $1,200 medical expenses + $1,040 food = $4,040) is more than half of Grace's $6,440 total support.
Example 2.
Your parents live with you, your spouse, and your two children in a house you own. The fair rental value of your parents' share of the lodging is $2,000 a year ($1,000 each), which includes furnishings and utilities. Your father receives a nontaxable pension of $4,200, which he spends equally between your mother and himself for items of support such as clothing, transportation, and recreation. Your total food expense for the household is $6,000. Your heat and utility bills amount to $1,200. Your mother has hospital and medical expenses of $600, which you pay during the year. Figure your parents' total support as follows:
Support provided | Father | Mother |
Fair rental value of lodging | $1,000 | $1,000 |
Pension spent for their support | 2,100 | 2,100 |
Share of food (1/6 of $6,000) | 1,000 | 1,000 |
Medical expenses for mother | 600 | |
Parents' total support | $4,100 | $4,700 |
You must apply the support test separately to each parent. You provide $2,000 ($1,000 lodging, $1,000 food) of your father's total support of $4,100 – less than half. You provide $2,600 to your mother ($1,000 lodging, $1,000 food, $600 medical) – more than half of her total support of $4,700. You meet the support test for your mother, but not your father. Heat and utility costs are included in the fair rental value of the lodging, so these are not considered separately.
Example.
Your parents live rent free in a house you own. It has a fair rental value of $5,400 a year furnished, which includes a fair rental value of $3,600 for the house and $1,800 for the furniture. This does not include heat and utilities. The house is completely furnished with furniture belonging to your parents. You pay $600 for their utility bills. Utilities are not usually included in rent for houses in the area where your parents live. Therefore, you consider the total fair rental value of the lodging to be $6,000 ($3,600 fair rental value of the unfurnished house, $1,800 allowance for the furnishings provided by your parents, and $600 cost of utilities) of which you are considered to provide $4,200 ($3,600 + $600).
Example 1.
You buy a $200 power lawn mower for your 13-year-old child. The child is given the duty of keeping the lawn trimmed. Because the lawn mower benefits all members of the household, you cannot include the cost of the lawn mower in the support of your child.
Example 2.
You buy a $150 television set as a birthday present for your 12-year-old child. The television set is placed in your child's bedroom. You can include the cost of the television set in the support of your child.
Example 3.
You pay $5,000 for a car and register it in your name. You and your 17-year-old daughter use the car equally. Because you own the car and do not give it to your daughter but merely let her use it, you cannot include the cost of the car in your daughter's total support. However, you can include in your daughter's support your out-of-pocket expenses of operating the car for her benefit.
Example 4.
Your 17-year-old son, using personal funds, buys a car for $4,500. You provide all the rest of your son's support – $4,000. Since the car is bought and owned by your son, the car's fair market value ($4,500) must be included in his support. Your son has provided more than half of his own total support of $8,500 ($4,500 + $4,000), so he is not your qualifying child. You did not provide more than half of his total support, so he is not your qualifying relative. You cannot claim an exemption for your son.
Example.
During the year, your son receives $2,200 from the government under the GI Bill. He uses this amount for his education. You provide the rest of his support – $2,000. Because GI benefits are included in total support, your son's total support is $4,200 ($2,200 + $2,000). You have not provided more than half of his support.
The following items are not included in total support.
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Federal, state, and local income taxes paid by persons from their own income.
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Social security and Medicare taxes paid by persons from their own income.
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Life insurance premiums.
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Funeral expenses.
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Scholarships received by your child if your child is a full-time student.
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Survivors' and Dependents' Educational Assistance payments used for the support of the child who receives them.
Sometimes no one provides more than half of the support of a person. Instead, two or more persons, each of whom would be able to take the exemption but for the support test, together provide more than half of the person's support.
When this happens, you can agree that any one of you who individually provides more than 10% of the person's support, but only one, can claim an exemption for that person as a qualifying relative. Each of the others must sign a statement agreeing not to claim the exemption for that year. The person who claims the exemption must keep these signed statements for his or her records. A multiple support declaration identifying each of the others who agreed not to claim the exemption must be attached to the return of the person claiming the exemption. Form 2120, Multiple Support Declaration, can be used for this purpose.
You can claim an exemption under a multiple support agreement for someone related to you or for someone who lived with you all year as a member of your household.
Worksheet 3-1. Worksheet for Determining Support
Funds Belonging to the Person You Supported | ||||||||||
1. | Enter the total funds belonging to the person you supported, including income received (taxable and nontaxable) and amounts borrowed during the year, plus the amount in savings and other accounts at the beginning of the year | 1. | ||||||||
2. | Enter the amount on line 1 that was used for the person's support | 2. | ||||||||
3. | Enter the amount on line 1 that was used for other purposes | 3. | ||||||||
4. | Enter the total amount in the person's savings and other accounts at the end of the year | 4. | ||||||||
5. | Add lines 2 through 4. (This amount should equal line 1.) | 5. | ||||||||
Expenses for Entire Household (where the person you supported lived) | ||||||||||
6. | Lodging (complete line 6a or 6b): | |||||||||
6a. Enter the total rent paid | 6a. | |||||||||
6b. Enter the fair rental value of the home. If the person you supported owned the home,
also include this amount in line 21. |
6b. | |||||||||
7. | Enter the total food expenses | 7. | ||||||||
8. | Enter the total amount of utilities (heat, light, water, etc. not included in line 6a or 6b) | 8. | ||||||||
9. | Enter the total amount of repairs (not included in line 6a or 6b) | 9. | ||||||||
10. | Enter the total of other expenses. Do not include expenses of maintaining the home, such as mortgage interest, real estate taxes, and insurance. | 10. | ||||||||
11. | Add lines 6a through 10. These are the total household expenses | 11. | ||||||||
12. | Enter total number of persons who lived in the household | 12. | ||||||||
Expenses for the Person You Supported | ||||||||||
13. | Divide line 11 by line 12. This is the person's share of the household expenses | 13. | ||||||||
14. | Enter the person's total clothing expenses | 14. | ||||||||
15. | Enter the person's total education expenses | 15. | ||||||||
16. | Enter the person's total medical and dental expenses not paid for or reimbursed by insurance | 16. | ||||||||
17. | Enter the person's total travel and recreation expenses | 17. | ||||||||
18. | Enter the total of the person's other expenses | 18. | ||||||||
19. | Add lines 13 through 18. This is the total cost of the person's support for the year | 19. | ||||||||
Did the Person Provide More Than Half of His or Her Own Support? | ||||||||||
20. | Multiply line 19 by 50% (.50) | 20. | ||||||||
21. | Enter the amount from line 2, plus the amount from line 6b if the person you supported owned
the home. This is the amount the person provided for his or her own support |
21. | ||||||||
22. | Is line 21 more than line 20?
No. You meet the support test for this person to be your qualifying child. If this person also meets the other tests to be a qualifying child, stop here; do not complete lines 23–26. Otherwise, go to line 23 and fill out the rest of the worksheet to determine if this person is your qualifying relative. Yes. You do not meet the support test for this person to be either your qualifying child or your qualifying relative. Stop here. |
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Did You Provide More Than Half? | ||||||||||
23. | Enter the amount others provided for the person's support. Include amounts provided by state, local, and other welfare societies or agencies. Do not include any amounts included on line 1. | 23. | ||||||||
24. | Add lines 21 and 23 | 24. | ||||||||
25. | Subtract line 24 from line 19. This is the amount you provided for the person's support | 25. | ||||||||
26. | Is line 25 more than line 20?
Yes. You meet the support test for this person to be your qualifying relative. No. You do not meet the support test for this person to be your qualifying relative. You cannot claim an exemption for this person unless you can do so under a multiple support agreement, the support test for children of divorced or separated parents, or the special rule for kidnapped children. See Multiple Support Agreement , Support Test for Children of Divorced or Separated Parents, or Kidnapped Child under Qualifying Relative. |
Example 1.
You, your sister, and your two brothers provide the entire support of your mother for the year. You provide 45%, your sister 35%, and your two brothers each provide 10%. Either you or your sister can claim an exemption for your mother. The other must sign a statement agreeing not to take an exemption for your mother. The one who claims the exemption must attach Form 2120, or a similar declaration, to his or her return and must keep the statement signed by the other for his or her records. Because neither brother provides more than 10% of the support, neither can take the exemption and neither has to sign a statement.
Example 2.
You and your brother each provide 20% of your mother's support for the year. The remaining 60% of her support is provided equally by two persons who are not related to her. She does not live with them. Because more than half of her support is provided by persons who cannot claim an exemption for her, no one can take the exemption.
Example 3.
Your father lives with you and receives 25% of his support from social security, 40% from you, 24% from his brother (your uncle), and 11% from a friend. Either you or your uncle can take the exemption for your father if the other signs a statement agreeing not to. The one who takes the exemption must attach Form 2120, or a similar declaration, to his return and must keep for his records the signed statement from the one agreeing not to take the exemption.
In most cases, a child of divorced or separated parents will be a qualifying child of one of the parents. See Children of divorced or separated parents under Qualifying Child, earlier. However, if the child does not meet the requirements to be a qualifying child of either parent, the child may be a qualifying relative of one of the parents. In that case, the following rules must be used in applying the support test.
A child will be treated as being the qualifying relative of his or her noncustodial parent if all four of the following statements are true.
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The parents:
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Are divorced or legally separated under a decree of divorce or separate maintenance,
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Are separated under a written separation agreement, or
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Lived apart at all times during the last 6 months of the year.
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The child received over half of his or her support for the year from the parents.
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The child is in the custody of one or both parents for more than half of the year.
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Either of the following statements is true.
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The custodial parent signs a written declaration, discussed later, that he or she will not claim the child as a dependent for the year, and the noncustodial parent attaches this written declaration to his or her return. (If the decree or agreement went into effect after 1984, see Divorce decree or separation agreement made after 1984 , later.)
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A pre-1985 decree of divorce or separate maintenance or written separation agreement that applies to 2007 states that the noncustodial parent can claim the child as a dependent, the decree or agreement was not changed after 1984 to say the noncustodial parent cannot claim the child as a dependent, and the noncustodial parent provides at least $600 for the child's support during the year.
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The noncustodial parent can claim the child as a dependent without regard to any condition, such as payment of support.
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The custodial parent will not claim the child as a dependent for the year.
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The years for which the noncustodial parent, rather than the custodial parent, can claim the child as a dependent.
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The cover page (write the other parent's social security number on this page).
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The pages that include all of the information identified in items (1) through (3) above.
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The signature page with the other parent's signature and the date of the agreement.
The amount you can claim as a deduction for exemptions is reduced once your adjusted gross income (AGI) goes above a certain level for your filing status. These levels are as follows:
Filing Status | AGI Level That Reduces Exemption Amount | |
Married filing separately | $ 117,300 | |
Single | 156,400 | |
Head of household | 195,500 | |
Married filing jointly | 234,600 | |
Qualifying widow(er) | 234,600 |
You must reduce the dollar amount of your exemptions by 2% for each $2,500, or part of $2,500 ($1,250 if you are married filing separately), that your AGI exceeds the amount shown above for your filing status. However, you can lose no more than of the dollar amount of your exemptions. In other words, each exemption cannot be reduced to less than $1,133.
If your AGI exceeds the level for your filing status, use the Deduction for Exemptions Worksheet in the instructions for Form 1040 or Form 1040A to figure the amount of your deduction for exemptions.
You must list the social security number (SSN) of any dependent for whom you claim an exemption in column (2) of line 6c of your Form 1040 or Form 1040A.
If you do not list the dependent's SSN when required or if you list an incorrect SSN, the exemption may be disallowed.
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