- Are There Any Tax Deductions for a Son Who Does Not Live With Me But I Pay for College?
- Can I Claim State Sales Tax Deduction if I Do Not Pay State Income Tax?
- Red Flags on Income Tax Deductions
- Can I Claim Property Taxes on My Personal & Business Deductions?
- FAQs on Tax Deductions
- Can I Go Back & Claim Forgotten Deductions?
Only rarely are there simple answers to tax questions, and the rules associated with dependent deductions are some of the most complicated of all. It might be possible to claim your daughter for a deduction but not your grandson – or your grandson but not your daughter. If you're to claim both of them, a lot of factors must line up.
Your daughter's age is a pivotal factor in whether you can claim her as a dependent, because other rules apply depending on how old she is. If she's under 19, she passes the test as your qualifying child. She can also qualify as your dependent child if she's under 24, but a full-time student. If she's 24 or older, she might be your qualifying relative – as opposed to a qualifying child – if she lived with you more than half the year. She must also have earned less than the tax year's personal exemption amount – $3,900 for 2013. If your daughter is your qualifying relative, you must have provided more than half her support for the tax year, and if she's married, she can't file a joint return with her husband unless it's only to claim a refund and they owe no taxes.
Assuming your grandson meets the age test as your qualifying child, he might be your dependent if he didn't pay for more than half his own support during the tax year. He must also have lived with you more than half the year. Two taxpayers can't claim a tax deduction for the same child, however, so even if your grandson meets these tests, your daughter would have the first right to claim him as a dependent.
The Internal Revenue Service has tiebreaker rules that come into play when a child qualifies as the dependent of more than one taxpayer. The deduction goes to parents first, so even if your daughter doesn't claim your grandson as a dependent, his father could prevent you from doing so. The child's father could only claim the deduction if your grandson lived with him more than half the year, however, so if your grandson lived with you most of the time, this makes his father ineligible. Your daughter can also waive the right to claim your grandson and allow you to do so, but only if your adjusted gross income is more than hers. If she's your qualifying relative – not your qualifying child – this shouldn't be a problem, because her total earned income for the year cannot exceed $3,900.
Deductions and Credits
The most obvious tax perk associated with claiming your daughter and grandson as dependents is the dependent deduction. However, claiming your grandson – if you can do so – can further whittle away at your tax liability with certain tax credits. Depending on his age, you might be eligible for the child tax credit, and if you pay for day care on his behalf, you might qualify for the dependent care credit. You might also be able to claim an exclusion if you cover him under dependent care benefits.
- IRS: Dependents and Exemptions
- H&R Block: If My Adult Child and Grandchild Lived With Me for More Than Six Months, Can I Claim Them as Dependents?
- The Oregonian: Can I Claim My Daughter and Granddaughter as Dependents?
- IRS: Qualifying Child of More Than One Person
- IRS: In 2012, Many Tax Benefits Increase Due to Inflation Adjustments
- Forbes: IRS Announces 2013 Tax Rates, Standard Deduction Amounts and More
- Comstock Images/Comstock/Getty Images