Do relatives qualify as dependents on my tax return?

    Published: 06-16-2009
    Views: 11,957
    Goodman & Company Tax Director Art Auerbach lists circumstances in which relatives may qualify as dependents on your tax return.

    Host: Do relatives qualify as dependents on my tax return?

    Aurthur Auerbach: Relatives can qualify; this is the Qualifying Relative definition that was inserted in the Internal Revenue Code. Again, they have to meet the qualifications. The most obvious ones here are unfortunately, your parents might not be able to support themselves or they might have a medical condition that does permit them to live alone. So mom and dad come to live with you. They are living on your household, you are contributing toward their support and if you contribute more than half of their support, they maybe a dependent on your tax return. That might also apply to aunts, uncles, any elderly relative, people with medical or physical conditions that don't allow them to live by themselves. So you want to check the definition of Qualifying Relative, it's greatly expanded so the person may not be your biological child, but other relatives can get you the Dependency Exemption. Dependency Exemption again, is pretty important because to be head of household, I need a dependent living with me for at least six months out of the year where I am providing their support and providing their shelter. So I get a different filing status if I have a Qualifying Dependent. Also, this is going to lead later on to potential credits if you have to pay somebody to watch the individuals so a mom or dad are ill and you need a caregiver to be in the house during while you are out, gainfully employed, that might get you some credits later on in Dependent Care Credits, that will be reduction of your tax bills. So determining who a dependent is, be it qualifying child or qualifying relative, there are many things that attach to this when you get into the actual tax preparation.