Children require a lot of attention. They need plenty of time and energy to be properly supported and cared for. Thankfully, the IRS rewards parents or other individuals that look after a minor with tax breaks.
For parents or other individuals that have claimed a child as a dependant for years, there may be a decent amount of concern about how their taxes will change once the person reaches 18, and thus the definition of adulthood.
Do your taxes change significantly when a kid turns 18?
The IRS has a definition for a dependent known as a “qualifying child”. All it means is that you can claim a dependent on your tax return, and thus receive a much needed break on your taxes—so long as the person falls under the required criteria.
For starters, a qualifying child does not need to be your own child. However, the person does need to be related to you in some manner.
What about when the child is no longer considered a minor and turns 18? In many circumstances, the person can still get claimed as a dependent.
Qualifying Child Requirements
According to the IRS, a qualifying child must meet all six of the following requirements in order to get claimed as a dependent:
- The dependent must be related to you in some regard.
- The person must be under the age of 19 on the last day of the year, as well as younger than you. The exception is if the person is a full-time student. In that case, a qualifying child can still get claimed so long as the individual is under the age of 24 on the last day of the year.
- The person must have lived with you for more than half of the year.
- The dependent must not have received more than half of his or her own support from someone other than you in a given year. Support includes things like food, housing, medical coverage, and personal items like clothing.
- The person cannot file a joint tax return for the same year you wish to claim them as a dependent. Therefore, married couples are not considered qualifying children—even if they meet the other criteria.
- The person cannot be claimed as a dependent on another tax return. For example, separated spouses that both attempt to claim the child as their own dependent.
Age Requirements for a Qualifying Dependent
If you are able to meet the above criteria, then a person can get claimed as your dependent.
Since most people are reviewing this article for the specific question of how it impacts a child that just turned (or is about to turn) 18, let’s examine the age requirements closer.
A dependent can only be someone that is related to you and under the age of 19 on the last day of the year you are filing for. The person must also be younger than you. However, two exceptions exist:
- If the qualifying child is a full-time student and under the age of 24 on the last day of the year that you are filing for, the individual is still eligible as a qualifying child so long as the person also meets the other five criteria posted in the previous section.
- The person can remain a qualifying child with no age restrictions if the individual is (or becomes) permanently disabled during the tax year.
Exceptions to the Age Requirements
The IRS does have a few exceptions to the above age requirements that are fairly rare.
One of the most popular is how separated or divorced couples deal with a dependent. It does get complicated when one parent has custody of the child, yet the same child lived with the other individual or received more than half of his or her support from them.
In this event, it is possible for the individual that does not have custody to still claim the child as their own dependent. However, the individual must receive permission from the other partner in order to avoid both claiming the dependent—and both deductions getting negated as a result.
Some separated or divorced couples find common ground by alternating the years they can claim the child.
For more information regarding divorces and separations, and how they impact qualifying children—or for other age requirement exceptions, please contact Levy & Associates Tax Consultants at 800-TAX-LEVY, or www.levytaxhelp.com.