Test for Support
The taxpayer must have provided more than half of the total support, OR two or more people must have shared the support and provided more than half of the total support.
The dependent must be a household member or a close relative of BOTH contributors.
Many who are exchanging support must agree on who will demand the exemption.Do you want to learn more? Visit Metropolitan Income Tax and Book Keeping – El Paso book keeping
All donors must sign and file Form 2120 Multiple Support Declaration with their tax return.
Test of Gross Income
The dependent must have earned less than the necessary gross income for the tax year.
The only exception is if the dependent is the taxpayer’s child and is under the age of 19 at the end of the tax year, or if the dependent is a full-time student for at least 5 months of the year and is under the age of 24.
Tax-exempt income received by a completely and permanently disabled individual at a sheltered workshop run by a tax-exempt corporation or government entity is excluded from gross income.
Gross income includes gross receipts from rental properties as well as Schedule C income.
Test of Citizenship
The dependent must be a United States citizen, resident, or national, or a Canadian or Mexican resident.
If the adopted child lived with the taxpayer and was a member of the family for the whole year after the adoption was finalised, the citizenship test is waived.
Return Test for Joints
A dependent who files a joint return is not eligible for an exemption.
A joint return filed solely to demand a refund of tax withheld where neither partner is expected to file and no tax obligation exists is an exception.
Relationship or Member of Household Test
The dependent must be a child, grandchild, great grandchild, adopted, step child, brother, sister, half-brother, half-sister, brother-in-law, sister-in-law, step brother or sister, mother or father-in-law, step mother or father, aunt, uncle, niece, nephew, son-in-law, or daughter-in-law of the taxpayer for the entire year.
Children of Divorced or Separated Parents Take a Support Test
If the parents are divorced, legally split, or lived apart for the last six months of the year, one or both parents must provide more than half of the care, and one or both parents must have custody for more than half of the year, special rules apply.
If you try to report a dependent who does not meet the requirements, your income tax processing and refund, if you owe money, will be delayed.