The support test is one of several interlocking criteria that determine whether someone qualifies as your dependent for tax purposes. Dependents can be qualifying children or qualifying relatives.
Having a dependent no longer provides an exact dollar amount you can subtract from your taxable income, but having one or more can still open the door for several other tax breaks. Learn how the support test works, and how it can help you see if someone qualifies as your dependent.
Definition and Examples of the Support Test
The support test is a test the IRS provides to determine if your children or relatives qualify as dependents on your tax return. To qualify as your dependent, you have to provide more than 50% of the child or relative’s support.
For example, if you have an elderly relative you take care of and they pay for 70% of their living costs, they would not qualify as your dependent.
How the Support Test Works
To pass the support test and be a dependent, a child or relative of yours must get more than 50% of their support from you.
Say your teenager earns $2,500 from a summer job. As long as they don’t use that money to pay for more than 50% of their own support needs, the IRS considers them your dependent if you provide the remaining portion of their support. Your child’s income includes any Social Security survivor benefits they might receive and spend toward their own support.
While the math is pretty simple, the IRS has detailed rules about what counts as money you actually paid toward a prospective dependent’s support and which expenses you can include in your support calculations.
Qualifying Financial Support
The IRS has various rules about the money you use to support the prospective dependent. For example, you can factor in the following types of income you used to support the person in question:
- Income from your job
- Tax-exempt income
- Payments you make to a nursing home for the person’s care
- Temporary Assistance for Needy Families (TANF) funds you use to support the person
- Armed Forces dependency allotments
You can’t claim money paid to you by a child placement agency, state, or county for caring for a foster child as money paid by you toward support. This portion is deemed to have been provided by the state or agency that paid you. Likewise, the IRS considers public assistance benefits paid to an adult dependent as support paid by the state, not by the dependent or by the taxpayer.
Other types of income you can’t claim as money you spent on support includes:
- Allowances you paid your child that your child spent supporting themselves
- Money you earned that you didn’t spend on support
- Borrowed money you used to pay for support that you’ll pay back in a different tax year
- Social Security benefits your child uses to support themselves
The IRS provides a detailed worksheet you can use to figure out exactly how much your dependent paid toward their own qualifying support needs, and whether you can claim them on your tax return.
There are a number of categories of goods or services you can calculate into your support test.
For example, lodging is a key part of support expenses. The IRS considers the lodging costs you pay for a dependent as a percentage of the fair rental value of the area of your home that your dependent occupies. If the fair rental value of your home is $2,000 a month and your dependent takes up 20% of the home, their lodging would amount to $400 a month.
Your dependent does not have to actually live with you. Your elderly parent might reside in a nursing home, or may still be physically self-sufficient to live in their own home, but you provide financial assistance to help them make ends meet. You would calculate the support test in this case by measuring your contributions against their qualifying living expenses. You would meet this test if you pay more than $1,500 a month toward overall expenses of $3,000.
Other examples of expenses you provide for the prospective depend that you can add into the cost of your support include:
- Home repairs
- Out-of-pocket medical and dental bills
- Travel and recreation
The support test is one of four tests the person in question has to pass to qualify as a dependent. For children, the other three factors are their relationship to you, age, and where they lived during the year. For relatives, the other factors are their gross income, whether or not they’re your child, and where they lived during the year.
Claiming a Dependent on Your Tax Return
Claiming a qualifying dependent on your tax return can be as simple as checking the appropriate box and providing the necessary information. However, it can be a bit more complicated in some cases. If the person in question is an elderly parent who receives support from you and your two siblings, you’ll have to use IRS Form 2120 to determine who can claim the parent. Also, if a child’s parents are divorced and one parent has a right to claim the child as a dependent, that parent can transfer the right to the other parent with IRS Form 8332.
Benefits of Claiming Dependents
Your qualifying dependents may help you qualify for the following filing status and tax credits:
- Head of household filing status (subject to other rules)
- Earned income tax credit
- Child tax credit
- Child and dependent care tax credit
- Credit for other dependents
As such, it’s worth crunching the numbers via the IRS’ dependents worksheet to determine whether Grandma really is your dependent or if your teenager paid too much toward their own support to qualify.
- The support test is one of several tests that determine whether an individual can qualify as a taxpayer’s dependent.
- The test measures how much a qualifying child or qualifying relative pays toward their own support needs from their own money.
- Children can’t pay for more than half their own support and still qualify as a taxpayer’s dependent.
- Taxpayers must pay at least half of a qualifying relative's support for that individual to be claimed as a dependent.