Qualifying Relative
Candlefocus EditorAccording to IRS definition, a qualifying relative is someone who can be claimed as a dependent if they meet all the following conditions:
* The individual is related to the taxpayer as a child, stepchild, foster child, sibling, half-sibling, or a direct descendant of any of these individuals. * The individual must not necessarily live with the taxpayer, but the qualified relative must be claimed as a dependent, and cannot file a joint tax return with anyone else. * The individual must not have earned more than $4,200 in gross income for the year. * The qualified relative must receive more than half of their financial support from the taxpayer. This requirement usually refers to more than just money, and may include food, shelter, and other such necessities.
If all these requirements are fulfilled, the person can then be claimed as a qualifying relative on the taxpayer’s taxes. Depending on the individual’s situation, some tax credits can be available to those who claim a qualifying relative, including the Earned Income Tax Credit or Child Tax Credit. It’s always best to speak to an expert to see if these credits are applicable.
A qualifying relative also plays a role in potentially reducing a taxpayer’s liability on their taxes. Each dependent reduces an individual’s taxable income by $4,050 on their taxes, which will lower the amount of taxes they owe.
It’s important to remember that claiming a qualifying relative is not guaranteed and each individual situation must meet the Internal Revenue Services’ definition to be considered valid. Ultimately, seeking advice from a qualified tax professional or applying to a legal filing service can help determine if someone meets the IRS definition for a qualifying relative.