Personal Exemptions and Dependents on the 2022 Federal Income Tax Return

The Tax Cuts and Jobs Act (TCJA) reduced the exemption deduction to $0 for the years 2018 to 2025, thereby suspending the deduction for exemptions. Nevertheless, there are other provisions of the Internal Revenue Code (IRC) that use the personal exemption amount.

For those purposes the exemption amount that would otherwise have applied for the tax year is used. For example, for the year 2022 when determining if an individual is another individual’s dependent because he or she meets the test of being a qualifying relative, an exemption amount of $4,400 is used for the “gross income” test.

A qualifying relative is relevant for purposes of determining;

(1) Head of Household filing status; and

(2) Eligibility for the $500 tax credit allowed for certain other dependents.

Qualifying Child and a Qualifying Relative

The term “dependent’ means either a: (1) Qualifying child or a (2) Qualifying relative. The primary differences between a qualifying child and qualifying relative are the tax attributes allowed for each. A qualifying child potentially qualifies the individual claiming the qualified child as a dependent for the following items:

– the dependency exemption
– the child tax credit
– the earned income tax credit
– the dependent care tax credit
– the head of household filing status

A qualifying relative allows the individual claiming the qualifying relative as a dependent for a dependent exemption, and in limited cases, head of household filing status.

Basic Tests for Claiming a Qualified Child or a Qualified Relative

There are three basic tests that are used to determine whether an individual is claiming a qualifying child or a qualifying relative as a dependent. The tests are:

• Individual is not the dependent of another individual. An individual cannot claim anyone as a dependent if he or she can be claimed as a dependent by another individual.

• Joint return. A married person who files a joint return cannot be claimed as a dependent. There is one exception and that is the case of a married individual who: (1) Files a joint return only to claim a refund of income tax withheld when neither spouse is required to file; and (2) No tax liability would exist for either spouse if separate returns were filed.

• Citizen or resident. To be a dependent, the person must be one of the following: (1) US citizen or national or a resident alien; or (2) Resident of Canada or Mexico. There is one exception – a child does not have to meet this test if the child has been legally adopted by a US citizen or national. The child must have the same principal place of abode as the individual (the parent) and the child is a member of the individual’s household. This exception also applies if the child was lawfully placed with the individual for adoption.

The following tables summarizes the tests for claiming a qualifying child or a qualified relative as a dependent:

What Are the Requirements to Be a Qualifying Child?

Effective for tax years beginning after 12/31/2004, the Jobs Creation Act of 2004 amended IRC Section 152 to establish a uniform definition of a qualifying child for the above provision as each provision had, prior to 2005, separate criteria for determining whether the individual qualified for the applicable tax benefit with respect to a particular child.

The following tests determine a qualifying child. Under the uniform definition in IRC Section 152, a child is a qualifying child of an individual if the child meets the following six tests: (1) Relationship; (2) Age; (3) Residency: (4) Support; (5) Joint return; and (6) Tie-breaker if the child is the qualifying child of more than one person (for a divorced couple).

The following table summarizes the six tests that must be met in order for a child to be a qualifying child.

In summary, these six tests are used for the purpose of an individual claiming a child as a qualified child thereby enabling the individual to claim the dependency exemption, the child tax credit, the earned income tax credit, the dependent care tax credit, and/or the head of household filing status.

What are the Requirements to be a “Qualifying Relative”?

A qualifying relative is a person who is not a qualifying child of anyone else and who also meets the following three tests with respect to the individual who wants to claim the qualifying relative as a dependent: (1) Member of household; (2) Gross income; and (3) Support. The following table summarizes the three tests that must be meet in order for a person to be a qualifying relative:

In summary, these three tests are used for the purpose of an individual claiming a person as a qualifying relative thereby enabling the individual to claim the dependency exemption and in limited cases, head of household filing status.