Tax credits for other dependent is a way in which extended families and other nonrelatives can get tax credits. My dad is well-to-do but still depends on me at times. Last week, for instance, I had to take him for a dental checkup. He, however, is not a tax dependent.
The implication of this is that my mum (the wife) and I cannot get the credit for others dependent on him. This credit gives the taxpayer the option to claim $500 per person in a tax break. This applies to folks who depend on them but does not qualify for the Child Tax Credit. These are:
• College children depending on you, ages 17 and above
• Kids without Social Security Number but with an Individual Taxpayer Identification Number (ITIN)
• Adult dependents like the seniors
For many people, adult dependents are relatives. It, however, does not have to be formal family members. Any adult depending on you for support might qualify once the person meets any of the following qualifications:
• The person is Not Your Qualifying Child
Any of your children that are eligible for Child Tax Credit cannot be eligible for the credit for other dependent credit. This is not an issue for many families since they will prefer to claim the substantially larger child tax credit for qualifying kids.
Also, there is a base amount of $1,400, which is usually treated for inflation, which is refundable as the new Additional Child Tax Credit.
• The person must meet the relationship test
Here are the conditions that qualify one for the household test:
• Your stepfather or stepmother
• Your dad, mum, grandparent or any ancestor
• Your sister, brother, stepbrother, stepsister, half brother or half-sister
• The sister or brother of either of your parents
According to the IRS, anyone that is related to you in various ways, as discussed above, qualifies. You do not have to be living with these relatives for a full year.
On the condition, however, that the person is not a direct relative, if you have lived together for a whole year (365), the person could qualify.
• The person must meet the gross income test
The amount of money the dependent is making matters as well. The earning could not be more than $4,150 for the 2018 tax year. In 2019, it was raised to $4,200.
• You must meet the support test
The IRS considers how much the person claiming the credit, which is you, contributes to the dependent's life. This means you must be responsible for supporting more than half of the person's needs.
This is one of the ways my dad prevents us from laying claim to him as a dependent. He foots the majority of his expenses. Even the hospital bill of the day was on him. We only assist with things that are not too expensive like chocolate.
Concluding Remarks
If you have dependents as a taxpayer, it could qualify you for some form of a tax credit. The child tax credit is one of these, which applies to people whose dependents meet some qualifications. If the dependent, however, does not meet the qualification, you can claim credit for other dependents.
The following information can help you determine if you can claim the credit for other dependents in filing for your next tax.
• A child that qualifies for a child tax credit or the additional child tax credit is not eligible for credit for other dependents
• The qualifying person could be anyone – cousin, older kids, or parents. The person does not have to be related to you, as discussed above.
• You can get a maximum value of $500 for each qualifying kid
• The dependent must either be a citizen or a national. Resident alien also qualify
• If you are qualified to claim the credit for other dependents, you must submit the name and individual taxpayer identification number or the social security number for the dependents you are claiming.
• At a value of $200,000 of the modified adjusted gross income, the credit begins to phase out for singles. The value is $400,000 for married couples that are filing jointly.
