You are allowed one exemption for each person you can claim as a dependent. You can claim an exemption for a dependent even if your dependent files a return.
The term "dependent" means:
- A qualifying child, or
- A qualifying relative
Tests to be a qualifying relative:
- The person cannot be your qualifying child or the qualifying child of any other taxpayer.
- The person must either (a) be related to you in one of the ways listed under Relatives who do not have to live with you on page 19 of Pub. 501, or (b) live with you all year as a member of your household (and your relationship must not violate local law). There 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.
- The person's gross income for the year must be less than $4,000. There is an exception if the person is disabled and has income from a sheltered workshop.
- You must provide more than half of the person's total support for the year. There are exceptions for multiple support agreements, children of divorced or separated parents or parents who live apart, and kidnapped children.
See IRS Publication 501 Exemptions, Standard Deduction, and Filing Information for exceptions to the qualifying relative tests.
For more information on qualifying children, see Rules for Claiming. For instructions on how to enter dependent information in TaxAct, see Add Dependents in Program.