Today’s questions were submitted by Text Tom Club members in response to last week’s topic, tax filing and dependents.
Can two parents claim the same child for six months each?
The key question here is: How many taxpayers can claim a given dependent child? The answer is: one. So a married couple can claim a child as their dependent only when they file jointly. In all other cases, only one parent can claim the child.
If you support your girlfriend year-round while she is school, can she be claimed as a dependent?
This is a great example of why you need to get to the right question. Because one way of attempting to answer the question, “If someone is a full-time student, can you claim them as a dependent?” isn’t the heart of the matter. Being a full-time student helps somebody to qualify, but is not the key requirement. There are multiple stipulations the girlfriend would have to meet in order to be a “qualifying relative.” In this case, the monetary ones are probably the most important: Do you provide more than half her support and does she make less than $3,700 per year? If “no”, then your answer will be “no.”
What if she is a full time student, lives with the guy more than half the year, gets more than half her bills paid, all of that. Is the answer definitely “yes”?
The answer probably ends up being “yes.” You have to go through the checklist of what a qualifying relative is on the IRS website. But girlfriends and boyfriends as qualifying relatives can present some special challenges. Your living arrangements must not violate local law—and in some states cohabitation is legally prohibited if one of the persons is married to a third person. So if the girlfriend is still married—or the boyfriend is —the answer might be “no.”
I'm taking care of my 62-year-old disabled ex-husband. He gets $674 Social Security income check per month. He lives with me. Can I claim him as a dependent?
The ex-husband would generally count as a relative and being disabled helps meet certain qualifications, but those aren’t the key issues. One key question we just addressed—if a person has taxable income of more than $3,700 per year, they can’t qualify as a dependent. The follow-up question here would be: Is the $8,000-plus this ex-husband makes taxable income or not? Social Security income typically is not taxed—unless the person has other income. So as long as the ex-husband did not earn more than $25,000 from another source in the tax year in question, the path looks clear for claiming him as a dependent.
What about foster kids? Can they be qualifying dependents? How long must they spend in your home per year to qualify?
Foster children do count as qualifying children when other stipulations are met. The key question is, how long was a given foster child in your home? If more than half the year, you’re on the road to “yes.” If less than half the year, it’s “no.”
Isn’t there an income cut-off to be eligible for this dependent tax credit you have talked about?
Where dependents are concerned, there are both tax credits and tax exemptions. There are tax exemptions, which lower the amount of your income being taxed—say from $50,000 per year to $46,500. Then there are tax credits, which lower your tax bill directly—say from $7,000 to $6,000. The way the math works, if you could choose between a $1,000 credit and a $1,000 tax exemption, you would take the first one, not the second one. So far, we have only been talking about exemptions.
When referring to an income tax credit, is it correct to say there are sometimes income limits?
The quick answer is there isn’t a limit, but higher income taxpayers get less of the credit. We’re talking about the “Child and Dependent Care Credit.” If you pay for somebody to care for a dependent (child, spouse, or relative) so that you can work or look for work, you might be entitled to a tax credit. The credits can go up to $3,000 for singles or $6,000 for couples. At lower incomes, you get credits of up to 35% of your expenditures. At higher incomes, it’s 20% of what you spent. But there’s no income cut-off.
If you have questions for Mellody Hobson, text them to “646464” (OHOHOH).