The Family Tax Credit for Other Dependents for Tax Year 2019
Claim a tax credit for dependents age 17 and older
The Credit for Other Dependents, initially known as the Family Tax Credit, helps a lot of taxpayers who would otherwise have been left out in the cold because their children "aged out" of qualifying for the Child Tax Credit. They reached age 17, but these children would still qualify as their parents' dependents other than not meeting the 16-or-younger age limit for the Child Tax Credit.
Thanks to the Tax Cuts and Jobs Act, there's a tax credit that they can still qualify for. The same goes for adult dependents, such as a taxpayer's parents. They were never eligible for the Child Tax Credit in the first place and they never had a credit to call their own, but some taxpayers were supporting them nonetheless. Now they're eligible for the Credit for Other Dependents as well.
Unfortunately, the Credit for Other Dependents is only available while the TCJA is in effect—from 2018 through 2025—unless Congress steps in to reinstate it when it expires.
How Much Is the Credit for Other Dependents?
Unfortunately, the Credit for Other Dependents isn’t as beefy as the Child Tax Credit. The TCJA hiked the latter to $2,000 as of 2018, but the Credit for Other Dependents is only $500 for each dependent. Still, that’s a lot better than zero if your child turned 17 during the tax year.
It’s not a refundable credit, either, so the best it can do is reduce or eliminate your tax bill. It’s subtracted directly from any tax liability you might owe the IRS, but the IRS won’t be sending you a check if there’s anything left over.
The Child Tax Credit only covers child dependents up through the age of 16. After that, the Credit for Other Dependents kicks in to help with your children up to age 18, or to age 23 if they're still in school. There are no age limits for other "qualifying relatives," and the list of who's covered under this requirement is rather generous.
Your dependent doesn’t have to be your child for purposes of this credit. The Credit for Other Dependents also covers your parents, stepparents, grandparents, siblings, aunts, uncles, in-laws and even individuals who aren't related to you...provided that they otherwise qualify as your dependent for purposes of this credit.
Someone who meets all the qualifying rules might squeak in under the credit’s terms and manage to qualify even if she’s not related to you by blood or law. This credit applies to anyone who qualifies as your dependent.
Children who qualify for the Child Tax Credit do not qualify for the Credit for Other Dependents, however. It's not an either/or choice. A dependent can only be one or the other, and if they're under age 17, they're your child. But you can claim the Child Tax Credit for one dependent and the Credit for Other Dependents for another in the same tax year.
Your Dependent's Income
Claiming any of these dependents for purposes of the Credit for Other Dependents is subject to other rules, too, and one of them concerns your dependent’s income. This is where qualifying can become a bit complicated.
The Credit for Other Dependents was originally written to provide that your dependent could not have gross annual income in excess of the dependent exemption amount for that year. Then the the TCJA ended up simultaneously eliminating that exemption for years 2018 through 2025.
Nonetheless, Section 151(d)(5)(B) of the IRC retains the exemption amount for purposes of the Child Tax Credit and the Credit for Other Dependents. The income limit is therefore $4,200 for tax year 2019, the return you'll file in 2020.
The amount remains indexed for inflation, which means that it can be expected to increase periodically to keep up with the economy.
So your dependent can earn income up to $4,200, but that figure isn’t carved in stone. For planning purposes, however, you’re probably safe if you calculate based on about that amount because any change going forward shouldn’t be very significant.
Your Income Matters, Too
Like the Child Tax Credit, you can’t claim the Credit for Other Dependents if you earn too much, but the TCJA ramps up these caps significantly and the limits apply to both credits. They're available to taxpayers with incomes up to $400,000 if they're married and filing jointly, or $200,000 for all other taxpayers.
Beyond these thresholds, the amount of the credit you can claim begins phasing out or decreasing.
These limits used to be $110,000 and $75,000 before the TCJA went into effect.
Other Requirements for Dependents
Even if your dependent earns less than $4,200 in 2019, they still might not qualify because a few other requirements for this tax credit exist as well:
- Your dependent must have received more than half their financial support from you over the course of the tax year. They might or might not have to live with you throughout the year as well—it depends on their degree of relation to you. The tax code exempts some relatives from this rule, such as your parents—provided that you provide more than half their support while they’re living elsewhere.
- Your dependent must also be a U.S. citizen, a U.S. resident, or a U.S. national.
- They must have a valid Social Security number to qualify for the Child Tax Credit, and this is a change from 2017. But the rule for the Credit for Other Dependents is a bit looser. You can claim a dependent for purposes of this credit using a tax identification number (TIN) if they meet the other tests.
You can’t claim the credit for your spouse if you’re married and filing a joint return, nor can you claim it for yourself. But there’s no bar against taxpayers being able to claim this credit if they’re married but filing separate returns.
The IRS provides an interactive tool on its website to help you determine whether you and your dependent qualify. It takes about 10 minutes to complete, and it will tell you if your dependent is eligible for either the Child Tax Credit or the Credit for Other Dependents. You can also use a worksheet provided in IRS Publication 972.
Claiming the Credit for Other Dependents
The IRS doesn't make claiming this credit challenging or difficult. In fact, it's remarkably easy.
First, you must claim the individual as a dependent on your 2019 Form 1040, Form 1040-NR, or Form 1040-SR, along with their Social Security number or TIN. The SSN or TIN goes in Column 2 of the dependent section on your return, then just check the box for the Credit for Other Dependents in Column 4.
That's it. You're done...unless you've previously tried to claim the Child Tax Credit, the Additional Child Tax Credit, or the Credit for Other Dependents and were denied for any reason other than a simple clerical or math mistake. In this case, you must also file IRS Form 8862 with your Form 1040.