Tax Rules for Claiming Adult Dependents

Can you claim an adult as a dependent?

Image shows a younger woman helping an older woman filling out her tax forms. Text reads: "Tax rules for claiming adult dependents: needs to be qualifying relationship; resides with you (unrelated adult); follows state laws; meets income rule; meets the 51% rule; has social security number"

Image by July Bang © The Balance 2020

A taxpayer’s dependents don’t necessarily have to be children. You can claim certain adults as your dependents, too, but it's subject to a lot of rules.

The value of this tax provision is somewhat less than it's been in previous years, at least from 2018 through 2025 while the Tax Cuts and Jobs Act (TCJA) remains in effect, but the TCJA also provides an additional tax break for adult dependents through this time period.

Dependents and the Tax Cuts and Jobs Act

The TCJA takes away the personal exemptions you could once claim for yourself and each of your dependents of any age—$4,050 per person off your taxable income in 2017, the last tax year in which these exemptions were available. They're slated to return in tax year 2026.

In the meantime, you can still benefit from claiming dependents to some degree because having them can make you eligible for other tax perks, including the advantageous head of household filing status and the Child and Dependent Care Tax Credit. And the TCJA adds a tax credit for non-child dependents from 2018 through 2025.

The Family Tax Credit

Technically known as the "Tax Credit for Other Dependents," this is the credit provided for under the TCJA. Through 2017, it used to be that you could only claim the Child Tax Credit for each of your minor dependents. They had to be age 16 or younger as of the last day of the tax year.

You can still claim the Child Tax Credit for your younger kids, but your 17-plus-year-olds are no longer left out in the cold as long as they qualify as your dependents. The TCJA offers the Family Tax Credit for dependents over age 16.

Your dependent does not have to be your child to allow you to claim this credit. She can be your parent, sibling, or cousin—or not be related to you at all. She must meet all the other Internal Revenue Service qualifying rules for adult dependents, however.

The credit is $500 per dependent as of 2020.

The Relationship Rule

First, you must have a qualifying relationship with your would-be dependent. The individual must be either a close relative or must live with you.

Qualifying relatives include siblings, half-siblings, and step-siblings. They also include your parents, stepparents, grandparents, and even great-grandparents. Nieces, nephews, aunts, and uncles can all be your dependents, and your in-laws are covered by this rule, too.

Your in-laws don’t lose their potential status as your dependents if your spouse dies or you divorce.

Your adult son or daughter might also qualify as your dependent if you continue to support them—they're just no longer your “qualifying children” if they're older than 19 (or 24 if they're a student). They become “qualifying relatives" instead.

All these related individuals can be your dependents without actually living with you, but unrelated adults must reside in your home. If you file a joint return with your spouse, the relationship can be with either one of you. 

Your relationship with an unrelated dependent can’t be against the law in your state. For example, you might live with your girlfriend and meet all the other rules, but if she’s married to someone else, your living arrangement might be considered illegal. You couldn’t claim her as a dependent as a result.

The Income Rule

There must also be a good reason why your would-be dependent is costing you so much money, namely that they earn very little money of their own. Their total taxable income from all sources must be less than the personal exemption amount for the year in which you want to claim them.

This was $4,050 for 2017 and was raised to $4,150 in 2018, then to $4,200 in 2019.  Even though personal exemptions have been temporarily eliminated from the tax code, the TCJA retains these qualifying rules and the exemption amount for purposes of qualifying for other tax breaks.

You must look at your potential dependent's gross income—what he earned before taxes. This includes unemployment compensation, although not Social Security income that's not taxed. It can include public assistance.

The Support Rule

Even assuming that your dependent meets the income rule, what they do with their money also matters. The support rule requires that you provide at least 50.01%—more than half—of his support.

Let’s assume that your brother earned $4,000 last year, so he comes in just under the wire on the income test. He rents a room in someone’s home and his entire monthly living expenses are $500, or $6,000 a year. He uses his entire income to pay these expenses and you kick in the $2,000 balance.

He’s not your dependent. He can’t qualify even though he’s a relative who doesn’t have to live with you, and even though he earns less than the personal exemption for the year, because you’ve contributed just one-third to his support. 

If you change the numbers, however, it works. Your contribution comes out to $8,000 a year—more than half—if his monthly living expenses are $1,000 a month or $12,000 a year, and if he contributes the entirety of his $4,000 income and you pay the rest.

So far, so good. He still qualifies as your dependent.

Keep receipts for other expenses you pay for directly on your dependent's behalf. In addition to lodging and groceries, expenses that count as support under IRS rules include medical care, dental care, transportation, and clothing.

Multiple Support Agreements

The support that your would-be dependent receives from others counts, too. Maybe you have two siblings and they both kick in some money every month to help the brother who’s down on his luck. Your personal contribution must still be 51% or more unless they sign something called a Multiple Support Agreement, letting you claim him as a dependent regardless of their contributions.

A Multiple Support Agreement often comes into play when siblings pool their money together to support elderly parents. The agreement simply states the consent of the others to not claim the individual in question as a dependent. You must still contribute a minimum of 10% to his support, but this is considerably less than the 51% rule.

A Few Other Rules

If any of your potential dependents happen to be married, they can’t file joint returns with their spouses unless the sole purpose of filing the return is to claim a refund of overpaid taxes. And they can't be claimed by anyone else as a dependent, either.

Qualifying relatives must be U.S. citizens, resident aliens, or nationals. They must have Social Security numbers that you can cite on your tax return.

Special rules exist for dependents who live in Mexico or Canada for part of the year. Consult a tax professional if your dependent falls into this last narrow demographic.

Are You Confused?

Yes, these rules are complicated. The IRS anticipates that many taxpayers will have problems trying to figure out who they can claim and who they can't, so it provides an interactive tool on its website to help you along. Answer some questions and the tool will give you a yes or no answer. The process takes less than 15 minutes.

Article Sources

  1. IRS. "Five Things to Remember About Exemptions and Dependents for Tax Year 2017." Accessed April 2, 2020.

  2. IRS. "Internal Revenue Bulletin: 2020-10." Accessed April 2, 2020.

  3. IRS. "Topic No. 602 Child and Dependent Care Credit." Accessed April 2, 2020.

  4. IRS. "Child Tax Credit and Credit for Other Dependents at a Glance." Accessed April 2, 2020.

  5. IRS. "Publication 17 (2019), Your Federal Income Tax." Accessed April 2, 2020.

  6. TurboTax. "Who Can I Claim as a Dependent?" Accessed April 2, 2020.

  7. IRS. "Worksheet for Determining Support." Accessed April 2, 2020.

  8. Internal Revenue Service. "About Form 2020, Multiple Support Declaration," Accessed April 2, 2020.

  9. IRS. "Publication 501 (2019), Dependents, Standard Deduction, and Filing Information." Accessed April 2, 2020.