| Uniform
Definition of a Child
Effective For Tax Year 2005 And Later
Working Families Tax Relief Act of 2004 created a uniform
definition for a child for purposes of the dependency exemption,
the child tax credit, the earned income credit, the child
and dependent care credit, and head of household filing status.
The four tests under the new uniform definition are as follows:
- Dependent must have the same principal residence as the
taxpayer for more than half of the year.
- Dependent must be a qualifying relative (child, foster
child, brother, sister, stepbrother, or stepsister of the
taxpayer or descendent of any such relative).
- Dependent must be under the age of 19 at the end of the
tax year or under age 24 and a full-time student.
- Dependent must not provide more than half of his or her
own support for the calendar year.
Tie Breaking Rules
If a child may be, and is, claimed as a qualifying
child by two or more taxpayers, the child will be treated as
the qualifying child of the taxpayer who is a parent of the
individual. If no parent is involved, the taxpayer with the
highest adjusted gross income will claim the qualifying child.
If a child may be, and is, claimed as a qualifying child by
two or more parents who do not file a joint return, the child
will be treated as the qualifying child of the parent with whom
the child lived for the longest period of time during the taxable
year. If the child spent the same period of time with each parent,
the qualifying child will be claimed by the parent with the
highest adjusted gross income.
Divorce Impact
In the uniform definition of a qualifying child The
Working Families Act of 2004 inadvertently made it possible
for the non-custodial parent to claim the child as a dependency
exemption without a written declaration waiving the exemption
from the custodial parent. The Gulf Opportunity Zone Act made
the technical correction that the non-custodial parent cannot
claim the exemption UNLESS the custodial parent has signed a
written declaration that he/she will not claim the child as
a dependent and the non-custodial parent attaches this declaration
to their tax return (Form 8332). This waiver covers the dependency
exemption and the child tax credit. So basically they are correct;
a Form 8332 must be attached to all returns.
Child And Dependent Care Credit
The requirement to maintain a household in order to
receive the child and dependent care credits has been eliminated.
From January 2007
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