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Aarp free tax preparation 3. Aarp free tax preparation   Personal Exemptions and Dependents Table of Contents What's New Introduction Useful Items - You may want to see: ExemptionsPersonal Exemptions Exemptions for Dependents Qualifying Child Qualifying Relative Phaseout of Exemptions Social Security Numbers for DependentsBorn and died in 2013. Aarp free tax preparation Taxpayer identification numbers for aliens. Aarp free tax preparation Taxpayer identification numbers for adoptees. Aarp free tax preparation What's New Exemption amount. Aarp free tax preparation  The amount you can deduct for each exemption has increased. Aarp free tax preparation It was $3,800 for 2012. Aarp free tax preparation It is $3,900 for 2013. Aarp free tax preparation Exemption phaseout. Aarp free tax preparation  You lose at least part of the benefit of your exemptions if your adjusted gross income is more than a certain amount. Aarp free tax preparation For 2013, this amount is $150,000 for a married individual filing a separate return; $250,000 for a single individual; $275,000 for a head of household; and $300,000 for married individuals filing jointly or a qualifying widow(er). Aarp free tax preparation See Phaseout of Exemptions , later. Aarp free tax preparation Introduction This chapter discusses the following topics. Aarp free tax preparation Personal exemptions — You generally can take one for yourself and, if you are married, one for your spouse. Aarp free tax preparation Exemptions for dependents — You generally can take an exemption for each of your dependents. Aarp free tax preparation A dependent is your qualifying child or qualifying relative. Aarp free tax preparation 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. Aarp free tax preparation Phaseout of exemptions — Your deduction is reduced if your adjusted gross income is more than a certain amount. Aarp free tax preparation Social security number (SSN) requirement for dependents — You must list the SSN of any dependent for whom you claim an exemption. Aarp free tax preparation Deduction. Aarp free tax preparation   Exemptions reduce your taxable income. Aarp free tax preparation You can deduct $3,900 for each exemption you claim in 2013. Aarp free tax preparation But you may lose at least part of the dollar amount of your exemptions if your adjusted gross income is more than a certain amount. Aarp free tax preparation See Phaseout of Exemptions , later. Aarp free tax preparation How to claim exemptions. Aarp free tax preparation    How you claim an exemption on your tax return depends on which form you file. Aarp free tax preparation    If you file Form 1040EZ, the exemption amount is combined with the standard deduction amount and entered on line 5. Aarp free tax preparation    If you file Form 1040A, complete lines 6a through 6d. Aarp free tax preparation The total number of exemptions you can claim is the total in the box on line 6d. Aarp free tax preparation Also complete line 26. Aarp free tax preparation   If you file Form 1040, complete lines 6a through 6d. Aarp free tax preparation The total number of exemptions you can claim is the total in the box on line 6d. Aarp free tax preparation Also complete line 42. Aarp free tax preparation Useful Items - You may want to see: Publication 501 Exemptions, Standard Deduction, and Filing Information Form (and Instructions) 2120 Multiple Support Declaration 8332 Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent Exemptions There are two types of exemptions you may be able to take: Personal exemptions for yourself and your spouse, and Exemptions for dependents (dependency exemptions). Aarp free tax preparation While each is worth the same amount ($3,900 for 2013), different rules apply to each type. Aarp free tax preparation Personal Exemptions You are generally allowed one exemption for yourself. Aarp free tax preparation If you are married, you may be allowed one exemption for your spouse. Aarp free tax preparation These are called personal exemptions. Aarp free tax preparation Your Own Exemption You can take one exemption for yourself unless you can be claimed as a dependent by another taxpayer. Aarp free tax preparation 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. Aarp free tax preparation Your Spouse's Exemption Your spouse is never considered your dependent. Aarp free tax preparation Joint return. Aarp free tax preparation   On a joint return you can claim one exemption for yourself and one for your spouse. Aarp free tax preparation Separate return. Aarp free tax preparation   If you file a separate return, you can claim an exemption for your spouse only if your spouse had no gross income, is not filing a return, and was not the dependent of another taxpayer. Aarp free tax preparation This is true even if the other taxpayer does not actually claim your spouse as a dependent. Aarp free tax preparation You can claim an exemption for your spouse even if he or she is a nonresident alien; in that case, your spouse must have no gross income for U. Aarp free tax preparation S. Aarp free tax preparation tax purposes, must not be filing a return, and must not be the dependent of another taxpayer. Aarp free tax preparation Death of spouse. Aarp free tax preparation   If your spouse died during the year and you file a joint return for yourself and your deceased spouse, you generally can claim your spouse's exemption under the rules just explained in Joint return . Aarp free tax preparation If you file a separate return for the year, you may be able to claim your spouse's exemption under the rules just described in Separate return . Aarp free tax preparation   If you remarried during the year, you cannot take an exemption for your deceased spouse. Aarp free tax preparation   If you are a surviving spouse without gross income and you remarry in the year your spouse died, you can be claimed as an exemption on both the final separate return of your deceased spouse and the separate return of your new spouse for that year. Aarp free tax preparation If you file a joint return with your new spouse, you can be claimed as an exemption only on that return. Aarp free tax preparation Divorced or separated spouse. Aarp free tax preparation   If you obtained a final decree of divorce or separate maintenance during the year, you cannot take your former spouse's exemption. Aarp free tax preparation This rule applies even if you provided all of your former spouse's support. Aarp free tax preparation Exemptions for Dependents You are allowed one exemption for each person you can claim as a dependent. Aarp free tax preparation You can claim an exemption for a dependent even if your dependent files a return. Aarp free tax preparation The term “dependent” means: A qualifying child, or A qualifying relative. Aarp free tax preparation The terms “ qualifying child ” and “ qualifying relative ” are defined later. Aarp free tax preparation You can claim an exemption for a qualifying child or qualifying relative only if these three tests are met. Aarp free tax preparation Dependent taxpayer test. Aarp free tax preparation Joint return test. Aarp free tax preparation Citizen or resident test. Aarp free tax preparation These three tests are explained in detail later. Aarp free tax preparation All the requirements for claiming an exemption for a dependent are summarized in Table 3-1. Aarp free tax preparation Table 3-1. Aarp free tax preparation Overview of the Rules for Claiming an Exemption for a Dependent Caution. Aarp free tax preparation This table is only an overview of the rules. Aarp free tax preparation For details, see the rest of this chapter. Aarp free tax preparation You cannot claim any dependents if you (or your spouse, if filing jointly) could be claimed as a dependent by another taxpayer. Aarp free tax preparation   You cannot claim a married person who files a joint return as a dependent unless that joint return is filed only to claim a refund of withheld income tax or estimated tax paid. Aarp free tax preparation   You cannot claim a person as a dependent unless that person is a U. Aarp free tax preparation S. Aarp free tax preparation citizen, U. Aarp free tax preparation S. Aarp free tax preparation resident alien, U. Aarp free tax preparation S. Aarp free tax preparation national, or a resident of Canada or Mexico. Aarp free tax preparation 1  You cannot claim a person as a dependent unless that person is your qualifying child or qualifying relative. Aarp free tax preparation   Tests To Be a Qualifying Child   Tests To Be a Qualifying Relative The child must be your son, daughter, stepchild, foster child, brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant of any of them. Aarp free tax preparation   The child must be (a) under age 19 at the end of the year and younger than you (or your spouse, if filing jointly), (b) under age 24 at the end of the year, a student, and younger than you (or your spouse, if filing jointly), or (c) any age if permanently and totally disabled. Aarp free tax preparation   The child must have lived with you for more than half of the year. Aarp free tax preparation 2  The child must not have provided more than half of his or her own support for the year. Aarp free tax preparation   The child is not filing a joint return for the year (unless that return is filed only to get a refund of income tax withheld or estimated tax paid). Aarp free tax preparation  If the child meets the rules to be a qualifying child of more than one person, only one person can actually treat the child as a qualifying child. Aarp free tax preparation See the Special Rule for Qualifying Child of More Than One Person to find out which person is the person entitled to claim the child as a qualifying child. Aarp free tax preparation   The person cannot be your qualifying child or the qualifying child of any other taxpayer. Aarp free tax preparation   The person either (a) must be related to you in one of the ways listed under Relatives who do not have to live with you , or (b) must live with you all year as a member of your household2 (and your relationship must not violate local law). Aarp free tax preparation   The person's gross income for the year must be less than $3,900. Aarp free tax preparation 3  You must provide more than half of the person's total support for the year. Aarp free tax preparation 4  1There is an exception for certain adopted children. Aarp free tax preparation 2There are exceptions for temporary absences, children who were born or died during the year, children of divorced or separated parents (or parents who live apart), and kidnapped children. Aarp free tax preparation 3There is an exception if the person is disabled and has income from a sheltered workshop. Aarp free tax preparation 4There are exceptions for multiple support agreements, children of divorced or separated parents (or parents who live apart), and kidnapped children. Aarp free tax preparation Dependent not allowed a personal exemption. Aarp free tax preparation If you can claim an exemption for your dependent, the dependent cannot claim his or her own personal exemption on his or her own tax return. Aarp free tax preparation This is true even if you do not claim the dependent's exemption on your return. Aarp free tax preparation It is also true if the dependent's exemption on your return is reduced or eliminated under the phaseout rule described under Phaseout of Exemptions, later. Aarp free tax preparation Housekeepers, maids, or servants. Aarp free tax preparation   If these people work for you, you cannot claim exemptions for them. Aarp free tax preparation Child tax credit. Aarp free tax preparation   You may be entitled to a child tax credit for each qualifying child who was under age 17 at the end of the year if you claimed an exemption for that child. Aarp free tax preparation For more information, see chapter 34. Aarp free tax preparation Dependent Taxpayer Test If you can be claimed as a dependent by another person, you cannot claim anyone else as a dependent. Aarp free tax preparation Even if you have a qualifying child or qualifying relative, you cannot claim that person as a dependent. Aarp free tax preparation If you are filing a joint return and your spouse can be claimed as a dependent by someone else, you and your spouse cannot claim any dependents on your joint return. Aarp free tax preparation Joint Return Test You generally cannot claim a married person as a dependent if he or she files a joint return. Aarp free tax preparation Exception. Aarp free tax preparation   You can claim an exemption for a person who files a joint return if that person and his or her spouse file the joint return only to claim a refund of income tax withheld or estimated tax paid. Aarp free tax preparation Example 1—child files joint return. Aarp free tax preparation You supported your 18-year-old daughter, and she lived with you all year while her husband was in the Armed Forces. Aarp free tax preparation He earned $25,000 for the year. Aarp free tax preparation The couple files a joint return. Aarp free tax preparation You cannot take an exemption for your daughter. Aarp free tax preparation Example 2—child files joint return only as claim for refund of withheld tax. Aarp free tax preparation Your 18-year-old son and his 17-year-old wife had $800 of wages from part-time jobs and no other income. Aarp free tax preparation Neither is required to file a tax return. Aarp free tax preparation They do not have a child. Aarp free tax preparation Taxes were taken out of their pay so they filed a joint return only to get a refund of the withheld taxes. Aarp free tax preparation The exception to the joint return test applies, so you are not disqualified from claiming an exemption for each of them just because they file a joint return. Aarp free tax preparation You can claim exemptions for each of them if all the other tests to do so are met. Aarp free tax preparation Example 3—child files joint return to claim American opportunity credit. Aarp free tax preparation The facts are the same as in Example 2 except no taxes were taken out of your son's pay. Aarp free tax preparation He and his wife are not required to file a tax return. Aarp free tax preparation However, they file a joint return to claim an American opportunity credit of $124 and get a refund of that amount. Aarp free tax preparation Because claiming the American opportunity credit is their reason for filing the return, they are not filing it only to get a refund of income tax withheld or estimated tax paid. Aarp free tax preparation The exception to the joint return test does not apply, so you cannot claim an exemption for either of them. Aarp free tax preparation Citizen or Resident Test You cannot claim a person as a dependent unless that person is a U. Aarp free tax preparation S. Aarp free tax preparation citizen, U. Aarp free tax preparation S. Aarp free tax preparation resident alien, U. Aarp free tax preparation S. Aarp free tax preparation national, or a resident of Canada or Mexico. Aarp free tax preparation However, there is an exception for certain adopted children, as explained next. Aarp free tax preparation Exception for adopted child. Aarp free tax preparation   If you are a U. Aarp free tax preparation S. Aarp free tax preparation citizen or U. Aarp free tax preparation S. Aarp free tax preparation national who has legally adopted a child who is not a U. Aarp free tax preparation S. Aarp free tax preparation citizen, U. Aarp free tax preparation S. Aarp free tax preparation resident alien, or U. Aarp free tax preparation S. Aarp free tax preparation national, this test is met if the child lived with you as a member of your household all year. Aarp free tax preparation This exception also applies if the child was lawfully placed with you for legal adoption. Aarp free tax preparation Child's place of residence. Aarp free tax preparation   Children usually are citizens or residents of the country of their parents. Aarp free tax preparation   If you were a U. Aarp free tax preparation S. Aarp free tax preparation citizen when your child was born, the child may be a U. Aarp free tax preparation S. Aarp free tax preparation citizen and meet this test even if the other parent was a nonresident alien and the child was born in a foreign country. Aarp free tax preparation Foreign students' place of residence. Aarp free tax preparation   Foreign students brought to this country under a qualified international education exchange program and placed in American homes for a temporary period generally are not U. Aarp free tax preparation S. Aarp free tax preparation residents and do not meet this test. Aarp free tax preparation You cannot claim an exemption for them. Aarp free tax preparation However, if you provided a home for a foreign student, you may be able to take a charitable contribution deduction. Aarp free tax preparation See Expenses Paid for Student Living With You in chapter 24. Aarp free tax preparation U. Aarp free tax preparation S. Aarp free tax preparation national. Aarp free tax preparation   A U. Aarp free tax preparation S. Aarp free tax preparation national is an individual who, although not a U. Aarp free tax preparation S. Aarp free tax preparation citizen, owes his or her allegiance to the United States. Aarp free tax preparation U. Aarp free tax preparation S. Aarp free tax preparation nationals include American Samoans and Northern Mariana Islanders who chose to become U. Aarp free tax preparation S. Aarp free tax preparation nationals instead of U. Aarp free tax preparation S. Aarp free tax preparation citizens. Aarp free tax preparation Qualifying Child Five tests must be met for a child to be your qualifying child. Aarp free tax preparation The five tests are: Relationship, Age, Residency, Support, and Joint return. Aarp free tax preparation These tests are explained next. Aarp free tax preparation If a child meets the five tests to be the qualifying child of more than one person, a special rule applies to determine which person can actually treat the child as a qualifying child. Aarp free tax preparation See Special Rule for Qualifying Child of More Than One Person, later. Aarp free tax preparation Relationship Test To meet this test, a child must be: Your son, daughter, stepchild, foster child, or a descendant (for example, your grandchild) of any of them, or Your brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant (for example, your niece or nephew) of any of them. Aarp free tax preparation Adopted child. Aarp free tax preparation   An adopted child is always treated as your own child. Aarp free tax preparation The term “adopted child” includes a child who was lawfully placed with you for legal adoption. Aarp free tax preparation Foster child. Aarp free tax preparation   A foster child is an individual who is placed with you by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction. Aarp free tax preparation Age Test To meet this test, a child must be: Under age 19 at the end of the year and younger than you (or your spouse, if filing jointly), A student under age 24 at the end of the year and younger than you (or your spouse, if filing jointly), or Permanently and totally disabled at any time during the year, regardless of age. Aarp free tax preparation Example. Aarp free tax preparation Your son turned 19 on December 10. Aarp free tax preparation Unless he was permanently and totally disabled or a student, he does not meet the age test because, at the end of the year, he was not under age 19. Aarp free tax preparation Child must be younger than you or spouse. Aarp free tax preparation   To be your qualifying child, a child who is not permanently and totally disabled must be younger than you. Aarp free tax preparation However, if you are married filing jointly, the child must be younger than you or your spouse but does not have to be younger than both of you. Aarp free tax preparation Example 1—child not younger than you or spouse. Aarp free tax preparation Your 23-year-old brother, who is a student and unmarried, lives with you and your spouse. Aarp free tax preparation He is not disabled. Aarp free tax preparation Both you and your spouse are 21 years old, and you file a joint return. Aarp free tax preparation Your brother is not your qualifying child because he is not younger than you or your spouse. Aarp free tax preparation Example 2—child younger than your spouse but not younger than you. Aarp free tax preparation The facts are the same as in Example 1 except your spouse is 25 years old. Aarp free tax preparation Because your brother is younger than your spouse, and you and your spouse are filing a joint return, your brother is your qualifying child, even though he is not younger than you. Aarp free tax preparation Student defined. Aarp free tax preparation   To qualify as a student, your child must be, during some part of each of any 5 calendar months of the year: 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 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. Aarp free tax preparation The 5 calendar months do not have to be consecutive. Aarp free tax preparation Full-time student. Aarp free tax preparation   A full-time student is a student who is enrolled for the number of hours or courses the school considers to be full-time attendance. Aarp free tax preparation School defined. Aarp free tax preparation   A school can be an elementary school, junior or senior high school, college, university, or technical, trade, or mechanical school. Aarp free tax preparation However, an on-the-job training course, correspondence school, or school offering courses only through the Internet does not count as a school. Aarp free tax preparation Vocational high school students. Aarp free tax preparation   Students who work on “co-op” jobs in private industry as a part of a school's regular course of classroom and practical training are considered full-time students. Aarp free tax preparation Permanently and totally disabled. Aarp free tax preparation   Your child is permanently and totally disabled if both of the following apply. Aarp free tax preparation He or she cannot engage in any substantial gainful activity because of a physical or mental condition. Aarp free tax preparation A doctor determines the condition has lasted or can be expected to last continuously for at least a year or can lead to death. Aarp free tax preparation Residency Test To meet this test, your child must have lived with you for more than half the year. Aarp free tax preparation There are exceptions for temporary absences, children who were born or died during the year, kidnapped children, and children of divorced or separated parents. Aarp free tax preparation Temporary absences. Aarp free tax preparation   Your child is considered to have lived with you during periods of time when one of you, or both, are temporarily absent due to special circumstances such as: Illness, Education, Business, Vacation, or Military service. Aarp free tax preparation Your child is also considered to have lived with you during any required hospital stay following birth, as long as the child would have lived with you during that time but for the hospitalization. Aarp free tax preparation Death or birth of child. Aarp free tax preparation   A child who was born or died during the year is treated as having lived with you more than half of the year if your home was the child's home more than half of the time he or she was alive during the year. Aarp free tax preparation Child born alive. Aarp free tax preparation   You may be able to claim an exemption for a child born alive during the year, even if the child lived only for a moment. Aarp free tax preparation State or local law must treat the child as having been born alive. Aarp free tax preparation There must be proof of a live birth shown by an official document, such as a birth certificate. Aarp free tax preparation The child must be your qualifying child or qualifying relative, and all the other tests to claim an exemption for a dependent must be met. Aarp free tax preparation Stillborn child. Aarp free tax preparation   You cannot claim an exemption for a stillborn child. Aarp free tax preparation Kidnapped child. Aarp free tax preparation   You may be able to treat your child as meeting the residency test even if the child has been kidnapped. Aarp free tax preparation See Publication 501 for details. Aarp free tax preparation Children of divorced or separated parents (or parents who live apart). Aarp free tax preparation   In most cases, because of the residency test, a child of divorced or separated parents is the qualifying child of the custodial parent. Aarp free tax preparation However, the child will be treated as the qualifying child of the noncustodial parent if all four of the following statements are true. Aarp free tax preparation The parents: Are divorced or legally separated under a decree of divorce or separate maintenance, Are separated under a written separation agreement, or Lived apart at all times during the last 6 months of the year, whether or not they are or were married. Aarp free tax preparation The child received over half of his or her support for the year from the parents. Aarp free tax preparation The child is in the custody of one or both parents for more than half of the year. Aarp free tax preparation Either of the following statements is true. Aarp free tax preparation 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. Aarp free tax preparation (If the decree or agreement went into effect after 1984 and before 2009, see Post-1984 and pre-2009 divorce decree or separation agreement , later. Aarp free tax preparation If the decree or agreement went into effect after 2008, see Post-2008 divorce decree or separation agreement , later. Aarp free tax preparation ) A pre-1985 decree of divorce or separate maintenance or written separation agreement that applies to 2013 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. Aarp free tax preparation Custodial parent and noncustodial parent. Aarp free tax preparation   The custodial parent is the parent with whom the child lived for the greater number of nights during the year. Aarp free tax preparation The other parent is the noncustodial parent. Aarp free tax preparation   If the parents divorced or separated during the year and the child lived with both parents before the separation, the custodial parent is the one with whom the child lived for the greater number of nights during the rest of the year. Aarp free tax preparation   A child is treated as living with a parent for a night if the child sleeps: At that parent's home, whether or not the parent is present, or In the company of the parent, when the child does not sleep at a parent's home (for example, the parent and child are on vacation together). Aarp free tax preparation Equal number of nights. Aarp free tax preparation   If the child lived with each parent for an equal number of nights during the year, the custodial parent is the parent with the higher adjusted gross income (AGI). Aarp free tax preparation December 31. Aarp free tax preparation   The night of December 31 is treated as part of the year in which it begins. Aarp free tax preparation For example, December 31, 2013, is treated as part of 2013. Aarp free tax preparation Emancipated child. Aarp free tax preparation   If a child is emancipated under state law, the child is treated as not living with either parent. Aarp free tax preparation See Examples 5 and 6. Aarp free tax preparation Absences. Aarp free tax preparation   If a child was not with either parent on a particular night (because, for example, the child was staying at a friend's house), the child is treated as living with the parent with whom the child normally would have lived for that night, except for the absence. Aarp free tax preparation But if it cannot be determined with which parent the child normally would have lived or if the child would not have lived with either parent that night, the child is treated as not living with either parent that night. Aarp free tax preparation Parent works at night. Aarp free tax preparation   If, due to a parent's nighttime work schedule, a child lives for a greater number of days, but not nights, with the parent who works at night, that parent is treated as the custodial parent. Aarp free tax preparation On a school day, the child is treated as living at the primary residence registered with the school. Aarp free tax preparation Example 1—child lived with one parent for a greater number of nights. Aarp free tax preparation You and your child’s other parent are divorced. Aarp free tax preparation In 2013, your child lived with you 210 nights and with the other parent 155 nights. Aarp free tax preparation You are the custodial parent. Aarp free tax preparation Example 2—child is away at camp. Aarp free tax preparation In 2013, your daughter lives with each parent for alternate weeks. Aarp free tax preparation In the summer, she spends 6 weeks at summer camp. Aarp free tax preparation During the time she is at camp, she is treated as living with you for 3 weeks and with her other parent, your ex-spouse, for 3 weeks because this is how long she would have lived with each parent if she had not attended summer camp. Aarp free tax preparation Example 3—child lived same number of nights with each parent. Aarp free tax preparation Your son lived with you 180 nights during the year and lived the same number of nights with his other parent, your ex-spouse. Aarp free tax preparation Your AGI is $40,000. Aarp free tax preparation Your ex-spouse's AGI is $25,000. Aarp free tax preparation You are treated as your son's custodial parent because you have the higher AGI. Aarp free tax preparation Example 4—child is at parent’s home but with other parent. Aarp free tax preparation Your son normally lives with you during the week and with his other parent, your ex-spouse, every other weekend. Aarp free tax preparation You become ill and are hospitalized. Aarp free tax preparation The other parent lives in your home with your son for 10 consecutive days while you are in the hospital. Aarp free tax preparation Your son is treated as living with you during this 10-day period because he was living in your home. Aarp free tax preparation Example 5—child emancipated in May. Aarp free tax preparation When your son turned age 18 in May 2013, he became emancipated under the law of the state where he lives. Aarp free tax preparation As a result, he is not considered in the custody of his parents for more than half of the year. Aarp free tax preparation The special rule for children of divorced or separated parents does not apply. Aarp free tax preparation Example 6—child emancipated in August. Aarp free tax preparation Your daughter lives with you from January 1, 2013, until May 31, 2013, and lives with her other parent, your ex-spouse, from June 1, 2013, through the end of the year. Aarp free tax preparation She turns 18 and is emancipated under state law on August 1, 2013. Aarp free tax preparation Because she is treated as not living with either parent beginning on August 1, she is treated as living with you the greater number of nights in 2013. Aarp free tax preparation You are the custodial parent. Aarp free tax preparation Written declaration. Aarp free tax preparation    The custodial parent may use either Form 8332 or a similar statement (containing the same information required by the form) to make the written declaration to release the exemption to the noncustodial parent. Aarp free tax preparation The noncustodial parent must attach a copy of the form or statement to his or her tax return. Aarp free tax preparation   The exemption can be released for 1 year, for a number of specified years (for example, alternate years), or for all future years, as specified in the declaration. Aarp free tax preparation Post-1984 and pre-2009 divorce decree or separation agreement. Aarp free tax preparation   If the divorce decree or separation agreement went into effect after 1984 and before 2009, the noncustodial parent may be able to attach certain pages from the decree or agreement instead of Form 8332. Aarp free tax preparation The decree or agreement must state all three of the following. Aarp free tax preparation The noncustodial parent can claim the child as a dependent without regard to any condition, such as payment of support. Aarp free tax preparation The custodial parent will not claim the child as a dependent for the year. Aarp free tax preparation The years for which the noncustodial parent, rather than the custodial parent, can claim the child as a dependent. Aarp free tax preparation   The noncustodial parent must attach all of the following pages of the decree or agreement to his or her tax return. Aarp free tax preparation The cover page (write the other parent's social security number on this page). Aarp free tax preparation The pages that include all of the information identified in items (1) through (3) above. Aarp free tax preparation The signature page with the other parent's signature and the date of the agreement. Aarp free tax preparation Post-2008 divorce decree or separation agreement. Aarp free tax preparation   The noncustodial parent cannot attach pages from the decree or agreement instead of Form 8332 if the decree or agreement went into effect after 2008. Aarp free tax preparation The custodial parent must sign either Form 8332 or a similar statement whose only purpose is to release the custodial parent's claim to an exemption for a child, and the noncustodial parent must attach a copy to his or her return. Aarp free tax preparation The form or statement must release the custodial parent's claim to the child without any conditions. Aarp free tax preparation For example, the release must not depend on the noncustodial parent paying support. Aarp free tax preparation    The noncustodial parent must attach the required information even if it was filed with a return in an earlier year. Aarp free tax preparation Revocation of release of claim to an exemption. Aarp free tax preparation   The custodial parent can revoke a release of claim to exemption that he or she previously released to the noncustodial parent on Form 8332 (or a similar statement). Aarp free tax preparation For the revocation to be effective for 2013, the custodial parent must have given (or made reasonable efforts to give) written notice of the revocation to the noncustodial parent in 2012 or earlier. Aarp free tax preparation The custodial parent can use Part III of Form 8332 for this purpose and must attach a copy of the revocation to his or her return for each tax year he or she claims the child as a dependent as a result of the revocation. Aarp free tax preparation Remarried parent. Aarp free tax preparation   If you remarry, the support provided by your new spouse is treated as provided by you. Aarp free tax preparation Parents who never married. Aarp free tax preparation   This special rule for divorced or separated parents also applies to parents who never married, and who lived apart at all times during the last 6 months of the year. Aarp free tax preparation Support Test (To Be a Qualifying Child) To meet this test, the child cannot have provided more than half of his or her own support for the year. Aarp free tax preparation This test is different from the support test to be a qualifying relative, which is described later. Aarp free tax preparation However, to see what is or is not support, see Support Test (To Be a Qualifying Relative) , later. Aarp free tax preparation 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. Aarp free tax preparation Worksheet 3-1. Aarp free tax preparation Worksheet for Determining Support Funds Belonging to the Person You Supported       1. Aarp free tax preparation 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. Aarp free tax preparation Do not include funds provided by the state; include those amounts on line 23 instead 1. Aarp free tax preparation     2. Aarp free tax preparation Enter the amount on line 1 that was used for the person's support 2. Aarp free tax preparation     3. Aarp free tax preparation Enter the amount on line 1 that was used for other purposes 3. Aarp free tax preparation     4. Aarp free tax preparation Enter the total amount in the person's savings and other accounts at the end of the year 4. Aarp free tax preparation     5. Aarp free tax preparation Add lines 2 through 4. Aarp free tax preparation (This amount should equal line 1. Aarp free tax preparation ) 5. Aarp free tax preparation     Expenses for Entire Household (where the person you supported lived)       6. Aarp free tax preparation Lodging (complete line 6a or 6b):         a. Aarp free tax preparation Enter the total rent paid 6a. Aarp free tax preparation       b. Aarp free tax preparation Enter the fair rental value of the home. Aarp free tax preparation If the person you supported owned the home,  also include this amount in line 21 6b. Aarp free tax preparation     7. Aarp free tax preparation Enter the total food expenses 7. Aarp free tax preparation     8. Aarp free tax preparation Enter the total amount of utilities (heat, light, water, etc. Aarp free tax preparation not included in line 6a or 6b) 8. Aarp free tax preparation     9. Aarp free tax preparation Enter the total amount of repairs (not included in line 6a or 6b) 9. Aarp free tax preparation     10. Aarp free tax preparation Enter the total of other expenses. Aarp free tax preparation Do not include expenses of maintaining the home, such as mortgage interest, real estate taxes, and insurance 10. Aarp free tax preparation     11. Aarp free tax preparation Add lines 6a through 10. Aarp free tax preparation These are the total household expenses 11. Aarp free tax preparation     12. Aarp free tax preparation Enter total number of persons who lived in the household 12. Aarp free tax preparation     Expenses for the Person You Supported       13. Aarp free tax preparation Divide line 11 by line 12. Aarp free tax preparation This is the person's share of the household expenses 13. Aarp free tax preparation     14. Aarp free tax preparation Enter the person's total clothing expenses 14. Aarp free tax preparation     15. Aarp free tax preparation Enter the person's total education expenses 15. Aarp free tax preparation     16. Aarp free tax preparation Enter the person's total medical and dental expenses not paid for or reimbursed by insurance 16. Aarp free tax preparation     17. Aarp free tax preparation Enter the person's total travel and recreation expenses 17. Aarp free tax preparation     18. Aarp free tax preparation Enter the total of the person's other expenses 18. Aarp free tax preparation     19. Aarp free tax preparation Add lines 13 through 18. Aarp free tax preparation This is the total cost of the person's support for the year 19. Aarp free tax preparation     Did the Person Provide More Than Half of His or Her Own Support?       20. Aarp free tax preparation Multiply line 19 by 50% (. Aarp free tax preparation 50) 20. Aarp free tax preparation     21. Aarp free tax preparation Enter the amount from line 2, plus the amount from line 6b if the person you supported owned  the home. Aarp free tax preparation This is the amount the person provided for his or her own support 21. Aarp free tax preparation     22. Aarp free tax preparation Is line 21 more than line 20?   No. Aarp free tax preparation You meet the support test for this person to be your qualifying child. Aarp free tax preparation If this person also meets the other tests to be a qualifying child, stop here; do not complete lines 23–26. Aarp free tax preparation Otherwise, go to line 23 and fill out the rest of the worksheet to determine if this person is your qualifying relative. Aarp free tax preparation    Yes. Aarp free tax preparation You do not meet the support test for this person to be either your qualifying child or your qualifying relative. Aarp free tax preparation Stop here. Aarp free tax preparation        Did You Provide More Than Half?       23. Aarp free tax preparation Enter the amount others provided for the person's support. Aarp free tax preparation Include amounts provided by state, local, and other welfare societies or agencies. Aarp free tax preparation Do not include any amounts included on line 1 23. Aarp free tax preparation     24. Aarp free tax preparation Add lines 21 and 23 24. Aarp free tax preparation     25. Aarp free tax preparation Subtract line 24 from line 19. Aarp free tax preparation This is the amount you provided for the person's support 25. Aarp free tax preparation     26. Aarp free tax preparation Is line 25 more than line 20?   Yes. Aarp free tax preparation You meet the support test for this person to be your qualifying relative. Aarp free tax preparation    No. Aarp free tax preparation You do not meet the support test for this person to be your qualifying relative. Aarp free tax preparation 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. Aarp free tax preparation See Multiple Support Agreement or Support Test for Children of Divorced or Separated Parents (or Parents Who Live Apart) , or Kidnapped child under Qualifying Relative. Aarp free tax preparation   Example. Aarp free tax preparation You provided $4,000 toward your 16-year-old son's support for the year. Aarp free tax preparation He has a part-time job and provided $6,000 to his own support. Aarp free tax preparation He provided more than half of his own support for the year. Aarp free tax preparation He is not your qualifying child. Aarp free tax preparation Foster care payments and expenses. Aarp free tax preparation   Payments you receive for the support of a foster child from a child placement agency are considered support provided by the agency. Aarp free tax preparation Similarly, payments you receive for the support of a foster child from a state or county are considered support provided by the state or county. Aarp free tax preparation   If you are not in the trade or business of providing foster care and your unreimbursed out-of-pocket expenses in caring for a foster child were mainly to benefit an organization qualified to receive deductible charitable contributions, the expenses are deductible as charitable contributions but are not considered support you provided. Aarp free tax preparation For more information about the deduction for charitable contributions, see chapter 24. Aarp free tax preparation If your unreimbursed expenses are not deductible as charitable contributions, they may qualify as support you provided. Aarp free tax preparation   If you are in the trade or business of providing foster care, your unreimbursed expenses are not considered support provided by you. Aarp free tax preparation Example 1. Aarp free tax preparation Lauren, a foster child, lived with Mr. Aarp free tax preparation and Mrs. Aarp free tax preparation Smith for the last 3 months of the year. Aarp free tax preparation The Smiths cared for Lauren because they wanted to adopt her (although she had not been placed with them for adoption). Aarp free tax preparation They did not care for her as a trade or business or to benefit the agency that placed her in their home. Aarp free tax preparation The Smiths' unreimbursed expenses are not deductible as charitable contributions but are considered support they provided for Lauren. Aarp free tax preparation Example 2. Aarp free tax preparation You provided $3,000 toward your 10-year-old foster child's support for the year. Aarp free tax preparation The state government provided $4,000, which is considered support provided by the state, not by the child. Aarp free tax preparation See Support provided by the state (welfare, food stamps, housing, etc. Aarp free tax preparation ) , later. Aarp free tax preparation Your foster child did not provide more than half of her own support for the year. Aarp free tax preparation Scholarships. Aarp free tax preparation   A scholarship received by a child who is a student is not taken into account in determining whether the child provided more than half of his or her own support. Aarp free tax preparation Joint Return Test (To Be a Qualifying Child) To meet this test, the child cannot file a joint return for the year. Aarp free tax preparation Exception. Aarp free tax preparation   An exception to the joint return test applies if your child and his or her spouse file a joint return only to claim a refund of income tax withheld or estimated tax paid. Aarp free tax preparation Example 1—child files joint return. Aarp free tax preparation You supported your 18-year-old daughter, and she lived with you all year while her husband was in the Armed Forces. Aarp free tax preparation He earned $25,000 for the year. Aarp free tax preparation The couple files a joint return. Aarp free tax preparation Because your daughter and her husband file a joint return, she is not your qualifying child. Aarp free tax preparation Example 2—child files joint return only as a claim for refund of withheld tax. Aarp free tax preparation Your 18-year-old son and his 17-year-old wife had $800 of wages from part-time jobs and no other income. Aarp free tax preparation Neither is required to file a tax return. Aarp free tax preparation They do not have a child. Aarp free tax preparation Taxes were taken out of their pay so they filed a joint return only to get a refund of the withheld taxes. Aarp free tax preparation The exception to the joint return test applies, so your son may be your qualifying child if all the other tests are met. Aarp free tax preparation Example 3—child files joint return to claim American opportunity credit. Aarp free tax preparation The facts are the same as in Example 2 except no taxes were taken out of your son's pay. Aarp free tax preparation He and his wife were not required to file a tax return. Aarp free tax preparation However, they file a joint return to claim an American opportunity credit of $124 and get a refund of that amount. Aarp free tax preparation Because claiming the American opportunity credit is their reason for filing the return, they are not filing it only to get a refund of income tax withheld or estimated tax paid. Aarp free tax preparation The exception to the joint return test does not apply, so your son is not your qualifying child. Aarp free tax preparation Special Rule for Qualifying Child of More Than One Person If your qualifying child is not a qualifying child of anyone else, this special rule does not apply to you and you do not need to read about it. Aarp free tax preparation This is also true if your qualifying child is not a qualifying child of anyone else except your spouse with whom you file a joint return. Aarp free tax preparation If a child is treated as the qualifying child of the noncustodial parent under the rules for children of divorced or separated parents (or parents who live apart) described earlier, see Applying this special rule to divorced or separated parents (or parents who live apart), later. Aarp free tax preparation Sometimes, a child meets the relationship, age, residency, support, and joint return tests to be a qualifying child of more than one person. Aarp free tax preparation 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 take all of the following tax benefits (provided the person is eligible for each benefit). Aarp free tax preparation The exemption for the child. Aarp free tax preparation The child tax credit. Aarp free tax preparation Head of household filing status. Aarp free tax preparation The credit for child and dependent care expenses. Aarp free tax preparation The exclusion from income for dependent care benefits. Aarp free tax preparation The earned income credit. Aarp free tax preparation The other person cannot take any of these benefits based on this qualifying child. Aarp free tax preparation In other words, you and the other person cannot agree to divide these benefits between you. Aarp free tax preparation The other person cannot take any of these tax benefits for a child unless he or she has a different qualifying child. Aarp free tax preparation Tiebreaker rules. Aarp free tax preparation   To determine which person can treat the child as a qualifying child to claim these six tax benefits, the following tiebreaker rules apply. Aarp free tax preparation If only one of the persons is the child's parent, the child is treated as the qualifying child of the parent. Aarp free tax preparation If the parents file a joint return together and can claim the child as a qualifying child, the child is treated as the qualifying child of the parents. Aarp free tax preparation If the parents do not file a joint return together but both parents claim the child as a qualifying child, the IRS will treat the child as the qualifying child of the parent with whom the child lived for the longer period of time during the year. Aarp free tax preparation If the child lived with each parent for the same amount of time, the IRS will treat the child as the qualifying child of the parent who had the higher adjusted gross income (AGI) for the year. Aarp free tax preparation If no parent can claim the child as a qualifying child, the child is treated as the qualifying child of the person who had the highest AGI for the year. Aarp free tax preparation If a parent can claim the child as a qualifying child but no parent does so claim the child, the child is treated as the qualifying child of the person who had the highest AGI for the year, but only if that person's AGI is higher than the highest AGI of any of the child's parents who can claim the child. Aarp free tax preparation If the child's parents file a joint return with each other, this rule can be applied by dividing the parents' combined AGI equally between the parents. Aarp free tax preparation See Example 6 . Aarp free tax preparation   Subject to these tiebreaker rules, you and the other person may be able to choose which of you claims the child as a qualifying child. Aarp free tax preparation Example 1—child lived with parent and grandparent. Aarp free tax preparation You and your 3-year-old daughter Jane lived with your mother all year. Aarp free tax preparation You are 25 years old, unmarried, and your AGI is $9,000. Aarp free tax preparation Your mother's AGI is $15,000. Aarp free tax preparation Jane's father did not live with you or your daughter. Aarp free tax preparation You have not signed Form 8332 (or a similar statement) to release the child's exemption to the noncustodial parent. Aarp free tax preparation Jane is a qualifying child of both you and your mother because she meets the relationship, age, residency, support, and joint return tests for both you and your mother. Aarp free tax preparation However, only one of you can claim her. Aarp free tax preparation Jane is not a qualifying child of anyone else, including her father. Aarp free tax preparation You agree to let your mother claim Jane. Aarp free tax preparation This means your mother can claim Jane as a qualifying child for all of the six tax benefits listed earlier, if she qualifies (and if you do not claim Jane as a qualifying child for any of those tax benefits). Aarp free tax preparation Example 2—parent has higher AGI than grandparent. Aarp free tax preparation The facts are the same as in Example 1 except your AGI is $18,000. Aarp free tax preparation Because your mother's AGI is not higher than yours, she cannot claim Jane. Aarp free tax preparation Only you can claim Jane. Aarp free tax preparation Example 3—two persons claim same child. Aarp free tax preparation The facts are the same as in Example 1 except that you and your mother both claim Jane as a qualifying child. Aarp free tax preparation In this case, you, as the child's parent, will be the only one allowed to claim Jane as a qualifying child. Aarp free tax preparation The IRS will disallow your mother's claim to the six tax benefits listed earlier unless she has another qualifying child. Aarp free tax preparation Example 4—qualifying children split between two persons. Aarp free tax preparation The facts are the same as in Example 1 except you also have two other young children who are qualifying children of both you and your mother. Aarp free tax preparation Only one of you can claim each child. Aarp free tax preparation However, if your mother's AGI is higher than yours, you can allow your mother to claim one or more of the children. Aarp free tax preparation For example, if you claim one child, your mother can claim the other two. Aarp free tax preparation Example 5—taxpayer who is a qualifying child. Aarp free tax preparation The facts are the same as in Example 1 except you are only 18 years old and did not provide more than half of your own support for the year. Aarp free tax preparation This means you are your mother's qualifying child. Aarp free tax preparation If she can claim you as a dependent, then you cannot claim your daughter as a dependent because of the Dependent Taxpayer Test explained earlier. Aarp free tax preparation Example 6—child lived with both parents and grandparent. Aarp free tax preparation The facts are the same as in Example 1 except you are married to your daughter's father. Aarp free tax preparation The two of you live together with your daughter and your mother, and have an AGI of $20,000 on a joint return. Aarp free tax preparation If you and your husband do not claim your daughter as a qualifying child, your mother can claim her instead. Aarp free tax preparation Even though the AGI on your joint return, $20,000, is more than your mother's AGI of $15,000, for this purpose each parent's AGI can be treated as $10,000, so your mother's $15,000 AGI is treated as higher than the highest AGI of any of the child's parents who can claim the child. Aarp free tax preparation Example 7—separated parents. Aarp free tax preparation You, your husband, and your 10-year-old son lived together until August 1, 2013, when your husband moved out of the household. Aarp free tax preparation In August and September, your son lived with you. Aarp free tax preparation For the rest of the year, your son lived with your husband, the boy's father. Aarp free tax preparation 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, support, and joint return tests for both of you. Aarp free tax preparation 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 rule for children of divorced or separated parents (or parents who live apart) does not apply. Aarp free tax preparation You and your husband will file separate returns. Aarp free tax preparation Your husband agrees to let you treat your son as a qualifying child. Aarp free tax preparation This means, if your husband does not claim your son as a qualifying child, you can claim your son as a qualifying child for the dependency exemption, child tax credit, and exclusion for dependent care benefits (if you qualify for each of those tax benefits). Aarp free tax preparation However, you cannot claim head of household filing status because you and your husband did not live apart for the last 6 months of the year. Aarp free tax preparation 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. Aarp free tax preparation Example 8—separated parents claim same child. Aarp free tax preparation The facts are the same as in Example 7 except that you and your husband both claim your son as a qualifying child. Aarp free tax preparation In this case, only your husband will be allowed to treat your son as a qualifying child. Aarp free tax preparation This is because, during 2013, the boy lived with him longer than with you. Aarp free tax preparation If you claimed an exemption or the child tax credit for your son, the IRS will disallow your claim to both these tax benefits. Aarp free tax preparation If you do not have another qualifying child or dependent, the IRS will also disallow your claim to the exclusion for dependent care benefits. Aarp free tax preparation In addition, because you and your husband did not live apart for the last 6 months of the year, your husband cannot claim head of household filing status. Aarp free tax preparation 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. Aarp free tax preparation Example 9—unmarried parents. Aarp free tax preparation You, your 5-year-old son, and your son's father lived together all year. Aarp free tax preparation You and your son's father are not married. Aarp free tax preparation Your son is a qualifying child of both you and his father because he meets the relationship, age, residency, support, and joint return tests for both you and his father. Aarp free tax preparation Your AGI is $12,000 and your son's father's AGI is $14,000. Aarp free tax preparation Your son's father agrees to let you claim the child as a qualifying child. Aarp free tax preparation This means you can claim him as a qualifying child for the dependency exemption, 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, in fact, claim your son as a qualifying child for any of those tax benefits). Aarp free tax preparation Example 10—unmarried parents claim same child. Aarp free tax preparation The facts are the same as in Example 9 except that you and your son's father both claim your son as a qualifying child. Aarp free tax preparation In this case, only your son's father will be allowed to treat your son as a qualifying child. Aarp free tax preparation This is because his AGI, $14,000, is more than your AGI, $12,000. Aarp free tax preparation If you claimed an exemption or the child tax credit for your son, the IRS will disallow your claim to both these tax benefits. Aarp free tax preparation If you do not have another qualifying child or dependent, the IRS will also disallow your claim to the earned income credit, head of household filing status, the credit for child and dependent care expenses, and the exclusion for dependent care benefits. Aarp free tax preparation Example 11—child did not live with a parent. Aarp free tax preparation You and your 7-year-old niece, your sister's child, lived with your mother all year. Aarp free tax preparation You are 25 years old, and your AGI is $9,300. Aarp free tax preparation Your mother's AGI is $15,000. Aarp free tax preparation Your niece's parents file jointly, have an AGI of less than $9,000, and do not live with you or their child. Aarp free tax preparation Your niece is a qualifying child of both you and your mother because she meets the relationship, age, residency, support, and joint return tests for both you and your mother. Aarp free tax preparation However, only your mother can treat her as a qualifying child. Aarp free tax preparation This is because your mother's AGI, $15,000, is more than your AGI, $9,300. Aarp free tax preparation Applying this special rule to divorced or separated parents (or parents who live apart). Aarp free tax preparation   If a child is treated as the qualifying child of the noncustodial parent under the rules described earlier for children of divorced or separated parents (or parents who live apart), only the noncustodial parent can claim an exemption and the child tax credit for the child. Aarp free tax preparation However, the custodial parent, if eligible, or other eligible person can claim the child 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. Aarp free tax preparation If the child is the qualifying child of more than one person for these benefits, then the tiebreaker rules just explained determine which person can treat the child as a qualifying child. Aarp free tax preparation Example 1. Aarp free tax preparation You and your 5-year-old son lived all year with your mother, who paid the entire cost of keeping up the home. Aarp free tax preparation Your AGI is $10,000. Aarp free tax preparation Your mother's AGI is $25,000. Aarp free tax preparation Your son's father did not live with you or your son. Aarp free tax preparation Under the rules explained earlier for children of divorced or separated parents (or parents who live apart), your son is treated as the qualifying child of his father, who can claim an exemption and the child tax credit for him. Aarp free tax preparation Because of this, you cannot claim an exemption or the child tax credit for your son. Aarp free tax preparation However, your son's father cannot claim your son as a qualifying child for head of household filing status, the credit for child and dependent care expenses, the exclusion for dependent care benefits, or the earned income credit. Aarp free tax preparation You and your mother did not have any child care expenses or dependent care benefits, so neither of you can claim the credit for child and dependent care expenses or the exclusion for dependent care benefits. Aarp free tax preparation 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, support, and joint return tests for both you and your mother. Aarp free tax preparation (Note: The support test does not apply for the earned income credit. Aarp free tax preparation ) However, you agree to let your mother claim your son. Aarp free tax preparation 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 qualifying child for the earned income credit. Aarp free tax preparation (You cannot claim head of household filing status because your mother paid the entire cost of keeping up the home. Aarp free tax preparation ) Example 2. Aarp free tax preparation The facts are the same as in Example 1 except your AGI is $25,000 and your mother's AGI is $21,000. Aarp free tax preparation Your mother cannot claim your son as a qualifying child for any purpose because her AGI is not higher than yours. Aarp free tax preparation Example 3. Aarp free tax preparation The facts are the same as in Example 1 except you and your mother both claim your son as a qualifying child for the earned income credit. Aarp free tax preparation Your mother also claims him as a qualifying child for head of household filing status. Aarp free tax preparation 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. Aarp free tax preparation 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. Aarp free tax preparation Qualifying Relative Four tests must be met for a person to be your qualifying relative. Aarp free tax preparation The four tests are: Not a qualifying child test, Member of household or relationship test, Gross income test, and Support test. Aarp free tax preparation Age. Aarp free tax preparation   Unlike a qualifying child, a qualifying relative can be any age. Aarp free tax preparation There is no age test for a qualifying relative. Aarp free tax preparation Kidnapped child. Aarp free tax preparation   You may be able to treat a child as your qualifying relative even if the child has been kidnapped. Aarp free tax preparation See Publication 501 for details. Aarp free tax preparation Not a Qualifying Child Test A child is not your qualifying relative if the child is your qualifying child or the qualifying child of any other taxpayer. Aarp free tax preparation Example 1. Aarp free tax preparation Your 22-year-old daughter, who is a student, lives with you and meets all the tests to be your qualifying child. Aarp free tax preparation She is not your qualifying relative. Aarp free tax preparation Example 2. Aarp free tax preparation Your 2-year-old son lives with your parents and meets all the tests to be their qualifying child. Aarp free tax preparation He is not your qualifying relative. Aarp free tax preparation Example 3. Aarp free tax preparation Your son lives with you but is not your qualifying child because he is 30 years old and does not meet the age test. Aarp free tax preparation He may be your qualifying relative if the gross income test and the support test are met. Aarp free tax preparation Example 4. Aarp free tax preparation 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. Aarp free tax preparation He is not your qualifying child because he does not meet the residency test. Aarp free tax preparation He may be your qualifying relative if the gross income test and the support test are met. Aarp free tax preparation Child of person not required to file a return. Aarp free tax preparation   A child is not the qualifying child of any other taxpayer and so may qualify as your qualifying relative if the child's parent (or other person for whom the child is defined as a qualifying child) is not required to file an income tax return and either: Does not file an income tax return, or Files a return only to get a refund of income tax withheld or estimated tax paid. Aarp free tax preparation Example 1—return not required. Aarp free tax preparation You support an unrelated friend and her 3-year-old child, who lived with you all year in your home. Aarp free tax preparation Your friend has no gross income, is not required to file a 2013 tax return, and does not file a 2013 tax return. Aarp free tax preparation Both your friend and her child are your qualifying relatives if the support test is met. Aarp free tax preparation Example 2—return filed to claim refund. Aarp free tax preparation The facts are the same as in Example 1 except your friend had wages of $1,500 during the year and had income tax withheld from her wages. Aarp free tax preparation She files a return only to get a refund of the income tax withheld and does not claim the earned income credit or any other tax credits or deductions. Aarp free tax preparation Both your friend and her child are your qualifying relatives if the support test is met. Aarp free tax preparation Example 3—earned income credit claimed. Aarp free tax preparation The facts are the same as in Example 2 except your friend had wages of $8,000 during the year and claimed the earned income credit on her return. Aarp free tax preparation Your friend's child is the qualifying child of another taxpayer (your friend), so you cannot claim your friend's child as your qualifying relative. Aarp free tax preparation Child in Canada or Mexico. Aarp free tax preparation   You may be able to claim your child as a dependent even if the child lives in Canada or Mexico. Aarp free tax preparation If the child does not live with you, the child does not meet the residency test to be your qualifying child. Aarp free tax preparation However, the child may still be your qualifying relative. Aarp free tax preparation If the persons the child does live with are not U. Aarp free tax preparation S. Aarp free tax preparation citizens and have no U. Aarp free tax preparation S. Aarp free tax preparation gross income, those persons are not “taxpayers,” so the child is not the qualifying child of any other taxpayer. Aarp free tax preparation If the child is not the qualifying child of any other taxpayer, the child is your qualifying relative as long as the gross income test and the support test are met. Aarp free tax preparation   You cannot claim as a dependent a child who lives in a foreign country other than Canada or Mexico, unless the child is a U. Aarp free tax preparation S. Aarp free tax preparation citizen, U. Aarp free tax preparation S. Aarp free tax preparation resident alien, or U. Aarp free tax preparation S. Aarp free tax preparation national. Aarp free tax preparation There is an exception for certain adopted children who lived with you all year. Aarp free tax preparation See Citizen or Resident Test , earlier. Aarp free tax preparation Example. Aarp free tax preparation You provide all the support of your children, ages 6, 8, and 12, who live in Mexico with your mother and have no income. Aarp free tax preparation You are single and live in the United States. Aarp free tax preparation Your mother is not a U. Aarp free tax preparation S. Aarp free tax preparation citizen and has no U. Aarp free tax preparation S. Aarp free tax preparation income, so she is not a “taxpayer. Aarp free tax preparation ” Your children are not your qualifying children because they do not meet the residency test. Aarp free tax preparation But since they are not the qualifying children of any other taxpayer, they are your qualifying relatives and you can claim them as dependents. Aarp free tax preparation You may also be able to claim your mother as a dependent if the gross income and support tests are met. Aarp free tax preparation Member of Household or Relationship Test To meet this test, a person must either: Live with you all year as a member of your household, or Be related to you in one of the ways listed under Relatives who do not have to live with you . Aarp free tax preparation If at any time during the year the person was your spouse, that person cannot be your qualifying relative. Aarp free tax preparation However, see Personal Exemptions , earlier. Aarp free tax preparation Relatives who do not have to live with you. Aarp free tax preparation   A person related to you in any of the following ways does not have to live with you all year as a member of your household to meet this test. Aarp free tax preparation Your child, stepchild, foster child, or a descendant of any of them (for example, your grandchild). Aarp free tax preparation (A legally adopted child is considered your child. Aarp free tax preparation ) Your brother, sister, half brother, half sister, stepbrother, or stepsister. Aarp free tax preparation Your father, mother, grandparent, or other direct ancestor, but not foster parent. Aarp free tax preparation Your stepfather or stepmother. Aarp free tax preparation A son or daughter of your brother or sister. Aarp free tax preparation A son or daughter of your half brother or half sister. Aarp free tax preparation A brother or sister of your father or mother. Aarp free tax preparation Your son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law. Aarp free tax preparation Any of these relationships that were established by marriage are not ended by death or divorce. Aarp free tax preparation Example. Aarp free tax preparation You and your wife began supporting your wife's father, a widower, in 2006. Aarp free tax preparation Your wife died in 2012. Aarp free tax preparation Despite your wife's death, your father-in-law continues to meet this test, even if he does not live with you. Aarp free tax preparation You can claim him as a dependent if all other tests are met, including the gross income test and support test. Aarp free tax preparation Foster child. Aarp free tax preparation   A foster child is an individual who is placed with you by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction. Aarp free tax preparation Joint return. Aarp free tax preparation   If you file a joint return, the person can be related to either you or your spouse. Aarp free tax preparation Also, the person does not need to be related to the spouse who provides support. Aarp free tax preparation   For example, your spouse's uncle who receives more than half of his support from you may be your qualifying relative, even though he does not live with you. Aarp free tax preparation However, if you and your spouse file separate returns, your spouse's uncle can be your qualifying relative only if he lives with you all year as a member of your household. Aarp free tax preparation Temporary absences. Aarp free tax preparation   A person is considered to live with you as a member of your household during periods of time when one of you, or both, are temporarily absent due to special circumstances such as: Illness, Education, Business, Vacation, or Military service. Aarp free tax preparation   If the person is placed in a nursing home for an indefinite period of time to receive constant medical care, the absence may be considered temporary. Aarp free tax preparation Death or birth. Aarp free tax preparation   A person who died during the year, but lived with you as a member of your household until death, will meet this test. Aarp free tax preparation The same is true for a child who was born during the year and lived with you as a member of your household for the rest of the year. Aarp free tax preparation The test is also met if a child lived with you as a member of your household except for any required hospital stay following birth. Aarp free tax preparation   If your dependent died during the year and you otherwise qualify to claim an exemption for the dependent, you can still claim the exemption. Aarp free tax preparation Example. Aarp free tax preparation Your dependent mother died on January 15. Aarp free tax preparation She met the tests to be your qualifying relative. Aarp free tax preparation The other tests to claim an exemption for a dependent were also met. Aarp free tax preparation You can claim an exemption for her on your return. Aarp free tax preparation Local law violated. Aarp free tax preparation   A person does not meet this test if at any time during the year the relationship between you and that person violates local law. Aarp free tax preparation Example. Aarp free tax preparation Your girlfriend lived with you as a member of your household all year. Aarp free tax preparation However, your relationship with her violated the laws of the state where you live, because she was married to someone else. Aarp free tax preparation Therefore, she does not meet this test and you cannot claim her as a dependent. Aarp free tax preparation Adopted child. Aarp free tax preparation   An adopted child is always treated as your own child. Aarp free tax preparation The term “adopted child” includes a child who was lawfully placed with you for legal adoption. Aarp free tax preparation Cousin. Aarp free tax preparation   Your cousin meets this test only if he or she lives with you all year as a member of your household. Aarp free tax preparation A cousin is a descendant of a brother or sister of your father or mother. Aarp free tax preparation Gross Income Test To meet this test, a person's gross income for the year must be less than $3,900. Aarp free tax preparation Gross income defined. Aarp free tax preparation   Gross income is all income in the form of money, property, and services that is not exempt from tax. Aarp free tax preparation   In a manufacturing, merchandising, or mining business, gross income is the total net sales minus the cost of goods sold, plus any miscellaneous income from the business. Aarp free tax preparation   Gross receipts from rental property are gross income. Aarp free tax preparation Do not deduct taxes, repairs, or other expenses, to determine the gross income from rental property. Aarp free tax preparation   Gross income includes a partner's share of the gross (not a share of the net) partnership income. Aarp free tax preparation    Gross income also includes all taxable unemployment compensation and certain scholarship and fellowship grants. Aarp free tax preparation Scholarships received by degree candidates and used for tuition, fees, supplies, books, and equipment required for particular courses generally are not included in gross income. Aarp free tax preparation For more information about scholarships, see chapter 12. Aarp free tax preparation   Tax-exempt income, such as certain social security benefits, is not included in gross income. Aarp free tax preparation Disabled dependent working at sheltered workshop. Aarp free tax preparation   For purposes of the gross income test, the gross income of an individual who is permanently and totally disabled at any time during the year does not include income for services the individual performs at a sheltered workshop. Aarp free tax preparation The availability of medical care at the workshop must be the main reason for the individual's presence there. Aarp free tax preparation Also, the income must come solely from activities at the workshop that are incident to this medical care. Aarp free tax preparation   A “sheltered workshop” is a school that: Provides special instruction or training designed to alleviate the disability of the individual, and Is operated by certain tax-exempt organizations, or by a state, a U. Aarp free tax preparation S. Aarp free tax preparation possession, a political subdivision of a state or possession, the United States, or the District of Columbia. Aarp free tax preparation “Permanently and totally disabled” has the same meaning here as under Qualifying Child, earlier. Aarp free tax preparation Support Test (To Be a Qualifying Relative) To meet this test, you generally must provide more than half of a person's total support during the calendar year. Aarp free tax preparation 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. Aarp free tax preparation How to determine if support test is met. Aarp free tax preparation   You figure whether you have provided more than half of a person's total support by comparing the amount you contributed to that person's support with the entire amount of support that person received from all sources. Aarp free tax preparation This includes support the person provided from his or her own funds. Aarp free tax preparation   You may find Worksheet 3-1 helpful in figuring whether you provided more than half of a person's support. Aarp free tax preparation Person's own funds not used for support. Aarp free tax preparation   A person's own funds are not support unless they are actually spent for support. Aarp free tax preparation Example. Aarp free tax preparation Your mother received $2,400 in social security benefits and $300 in interest. Aarp free tax preparation She paid $2,000 for lodging and $400 for recreation. Aarp free tax preparation She put $300 in a savings account. Aarp free tax preparation 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. Aarp free tax preparation 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. Aarp free tax preparation Child's wages used for own support. Aarp free tax preparation   You cannot include in your contribution to your child's support any support paid for by the child with the child's own wages, even if you paid the wages. Aarp free tax preparation Year support is provided. Aarp free tax preparation   The year you provide the support is the year you pay for it, even if you do so with borrowed money that you repay in a later year. Aarp free tax preparation   If you use a fiscal year to report your income, you must provide more than half of the dependent's support for the calendar year in which your fiscal year begins. Aarp free tax preparation Armed Forces dependency allotments. Aarp free tax preparation   The part of the allotment contributed by the government and the part taken out of your military pay are both considered provided by you in figuring whether you provide more than half of the support. Aarp free tax preparation If your allotment is used to support persons other than those you name, you can take the exemptions for them if they otherwise qualify. Aarp free tax preparation Example. Aarp free tax preparation You are in the Armed Forces. Aarp free tax preparation You authorize an allotment for your widowed mother that she uses to support herself and her sister. Aarp free tax preparation 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. Aarp free tax preparation Tax-exempt military quarters allowances. Aarp free tax preparation   These allowances are treated the same way as dependency allotments in figuring support. Aarp free tax preparation The allotment of pay and the tax-exempt basic allowance for quarters are both considered as provided by you for support. Aarp free tax preparation Tax-exempt income. Aarp free tax preparation   In figuring a person's total support, include tax-exempt income, savings, and borrowed amounts used to support that person. Aarp free tax preparation Tax-exempt income includes certain social security benefits, welfare benefits, nontaxable life insurance proceeds, Armed Forces family allotments, nontaxable pensions, and tax-exempt interest. Aarp free tax preparation Example 1. Aarp free tax preparation You provide $4,000 toward your mother's support during the year. Aarp free tax preparation She has earned income of $600, nontaxable social security benefits of $4,800, and tax-exempt interest of $200. Aarp free tax preparation She uses all these for her support. Aarp free tax preparation 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 ($4,000 + $600 + $4,800 + $200). Aarp free tax preparation Example 2. Aarp free tax preparation Your niece takes out a student loan of $2,500 a

The Aarp Free Tax Preparation

Aarp free tax preparation 7. Aarp free tax preparation   Excess Contributions Table of Contents How Do I Know If I Have Excess Contributions? What Happens If I Have Excess Contributions?Excess Annual Addition Excess Elective Deferral If your actual contributions are greater than your MAC, you have an excess contribution. Aarp free tax preparation Excess contributions can result in income tax, additional taxes, and penalties. Aarp free tax preparation The effect of excess contributions depends on the type of excess contribution. Aarp free tax preparation This chapter discusses excess contributions to your 403(b) account. Aarp free tax preparation How Do I Know If I Have Excess Contributions? At the end of the year or the beginning of the next year, you should refigure your MAC based on your actual compensation and actual contributions made to your account. Aarp free tax preparation If the actual contributions to your account are greater than your MAC, you have excess contributions. Aarp free tax preparation If, at any time during the year, your employment status or your compensation changes, you should refigure your MAC using a revised estimate of compensation to prevent excess contributions. Aarp free tax preparation What Happens If I Have Excess Contributions? Certain excess contributions in a 403(b) account can be corrected. Aarp free tax preparation The effect of an excess 403(b) contribution will depend on the type of excess contribution. Aarp free tax preparation Types of excess contributions. Aarp free tax preparation   If, after checking your actual contributions, you determine that you have an excess, the first thing is to identify the type of excess that you have. Aarp free tax preparation Excess contributions to a 403(b) account are categorized as either an: Excess annual addition, or Excess elective deferral. Aarp free tax preparation Excess Annual Addition An excess annual addition is a contribution that is more than your limit on annual additions. Aarp free tax preparation To determine your limit on annual additions, see chapter 3 (chapter 5 for ministers or church employees). Aarp free tax preparation In the year that your contributions are more than your limit on annual additions, the excess amount will be included in your income. Aarp free tax preparation Excise Tax If your 403(b) account invests in mutual funds, and you exceed your limit on annual additions, you may be subject to a 6% excise tax on the excess contribution. Aarp free tax preparation The excise tax does not apply to funds in an annuity account or to excess deferrals. Aarp free tax preparation You must pay the excise tax each year in which there are excess contributions in your account. Aarp free tax preparation Excess contributions can be corrected by contributing less than the applicable limit in later years or by making permissible distributions. Aarp free tax preparation See chapter 8 for a discussion on permissible distributions. Aarp free tax preparation You cannot deduct the excise tax. Aarp free tax preparation Reporting requirement. Aarp free tax preparation   You must file Form 5330 if there has been an excess contribution to a custodial account and that excess has not been corrected. Aarp free tax preparation Excess Elective Deferral An excess elective deferral is the amount that is more than your limit on elective deferrals. Aarp free tax preparation To determine your limit on elective deferrals, see chapter 4. Aarp free tax preparation Your employer's 403(b) plan may contain language permitting it to distribute excess deferrals. Aarp free tax preparation If so, it may require that in order to get a distribution of excess deferrals, you either notify the plan of the amount of excess deferrals or designate a distribution as an excess deferral. Aarp free tax preparation The plan may require that the notification or designation be in writing and may require that you certify or otherwise establish that the designated amount is an excess deferral. Aarp free tax preparation A plan is not required to permit distribution of excess deferrals. Aarp free tax preparation Correction of excess deferrals during year. Aarp free tax preparation   If you have excess deferrals for a year, a corrective distribution may be made only if both of the following conditions are satisfied. Aarp free tax preparation The plan and either you or your employer designate the distribution as an excess deferral to the extent you have excess deferrals for the year. Aarp free tax preparation The correcting distribution is made after the date on which the excess deferral was made. Aarp free tax preparation Correction of excess deferrals after the year. Aarp free tax preparation   If you have excess deferrals for a year, you may receive a correcting distribution of the excess deferral no later than April 15 of the following year. Aarp free tax preparation The plan can distribute the excess deferral (and any income allocable to the excess) no later than April 15 of the year following the year the excess deferral was made. Aarp free tax preparation Tax treatment of excess deferrals not attributable to Roth contributions. Aarp free tax preparation   If the excess deferral is distributed by April 15, it is included in your income in the year contributed and the earnings on the excess deferral will be taxed in the year distributed. Aarp free tax preparation Tax treatment of excess deferrals attributable to Roth contributions. Aarp free tax preparation   For these rules, see Regulations section 1. Aarp free tax preparation 402(g)-1(e). Aarp free tax preparation Prev  Up  Next   Home   More Online Publications