Children are not the only people considered dependents by the IRS. Certain adults also have that status, based on their income, their living situation and how much you contribute to their expenses. With many adult dependents, the taxpayer is claiming a disabled person on their taxes.
The Tax Cuts and Jobs Act eliminated personal exemptions, so there is no tax credits for adult dependents per se in 2018, although some may qualify for the new $500 family tax credit.
Adult Dependent Tax Credit
Unrelated adult dependents may qualify if they lived with you for the entire tax year as a member of your household, and you must have provided at least half of their support. Related adult dependents include children, parents, grandchildren, stepchildren, foster children, full and half siblings, sons or daughters in-law, stepparents, grandparents, mothers or fathers in-law and blood aunts, uncles, nieces and nephews. An adult dependent cannot be a qualifying child for you or another person for tax purposes.
Keep in mind that the fair market value of staying in your house as a renter, even though no rent was charged, can help you establish providing more than half of an adult dependent’s support. You can also claim an adult dependent who died during the tax year as living with you for the entire year. Adult dependents must have U.S. citizenship, U.S. resident alien or U.S. national status. Certain Mexican and Canadian residents may qualify as adult dependents.
For example, if you had a child who was 22 years old, unmarried and unemployed living with you, he is your adult dependent if he did not have income exceeding $4,050 for 2017. Child Disability Tax Credit
Child Disability Tax Credit
If your child is permanently and totally disabled, you may claim them as a dependent no matter how old they are. Such eligible adult dependents “cannot engage in any substantial gainful activity because of a physical or mental condition,” according to the IRS. A doctor must have determined that the dependent’s condition has lasted or is expected to last a year or more, or that it could lead to death. In such cases, the adult dependent’s gross income does not include “income from services the individual performs at a sheltered workshop,” according to the IRS. Such workshops include those located in hospitals and similar institutions, Department of Veterans Affairs sponsored home and homebound work. Adult dependents must meet all other dependency qualifications.
Claiming Adults as Dependents 2018
The Tax Cuts and Jobs Act, signed into law on Dec. 22, 2017, eliminates personal exemptions for dependents until the expiration of the law in 2026. That means the adult dependent tax credit is gone until that time. The law raised the standard deduction to $12,000 for individuals and $24,000 for married couples, nearly doubling the former amount. The rise in the standard deduction may make up for the loss of the adult dependent exemption for many families. However, the law does establish a family tax credit worth up to $500 for which your adult dependent may qualify. Such persons are considered non-child dependents under the law. There is no need to itemize to receive this credit, and the credit is a flat-tax reduction.
The new tax law raised the amount of the child tax credit from $1,000 to $2,000 per child, with children under age 17 at the end of the year qualifying for this credit. This does not affect adult dependents. You may also claim the child care and dependent tax credit for a spouse or dependent who lived with you for more than half the year and is "physically or mentally incapable of self-care," according to the IRS. You may claim the credit if you paid expenses for qualifying individuals care so that you could either go to work or actively seek employment. The credit's amount is a percentage of the work-related expenses paid to someone caring for the qualifying individual and is based on your adjusted gross income. The maximum amount of the credit per qualifying individual is $3,000.
For 2017, claiming an adult dependent on your income tax form may reduce your taxable income by $4,050. As noted, the adult dependent cannot have had income in excess of that amount to qualify.
- IRS: Understanding the Child and Dependent Care Tax Credit
- Congressional Research Office: Child and Dependent Care Tax Benefits: How They Work and Who Receives Them
- Complete Controller: 2018 Family Tax Credit Guide
- Darby, Wendland & Co PC: Adult Dependent Exemption Eliminated Under New Tax Law
- IRS: Living and Working with Disabilities
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