by Rebecca A. Olson
The Working Families Tax Relief Act of 2004 provided a simplified and uniform definition of a dependant for tax purposes which went into effect January 1, 2005. Dependants are now categorized as either a “qualifying child” or a “qualifying relative.” The new uniform definition applies for the personal exemption, child tax credit, earned income tax credit, child and dependant care credit and head-of-household status.
Qualifying Child
Under the new uniform definition, a taxpayer’s children include the taxpayer’s natural children, stepchildren, adopted children and eligible foster children. To be a “qualifying child”, an individual must meet the following criteria:
- Must be a U.S. citizen or national or resident of the U.S., Canada or Mexico.
- Must be under age 19 at the end of the year or be a full-time student under the age of 24.
- Must share a home with the taxpayer for more than half the year.
- Must not provide more than half of his or her own support.
- Must be the taxpayer’s child (see definition above), or a descendant of the taxpayer’s child (i.e. grandchildren) or be the taxpayer’s brother or sister or be a descendent of the taxpayer’s brother or sister (niece or nephew, related by blood.)
Qualifying Relative
A “qualifying relative” must meet the following criteria:
- Must be a U.S. citizen or national or resident of the U.S., Canada or Mexico.
- Must receive at least one-half of his or her total annual support from the taxpayer.
- Must not have gross income in excess of the annual exemption amount ($3,200 in 2005 and $3,300 in 2006.)
- Must either be related to the taxpayer, or share the taxpayer’s home and be a member of the taxpayer’s household.
Applicable to both the definition of qualifying child or qualifying relative is the requirement that a married dependant must not file a joint tax return with his or her spouse.
