If you're responsible for the care of a dependent at home, you may be able to take a tax exemption for them, which reduces the amount of money on which you have to pay income tax. The IRS puts a few conditions on exemptions for adult children, with the basic requirement that the dependent may not provide more than half of his own support. An adult child may also provide you with itemizable deductions.
Age Test for Qualifying Child
You can take an exemption for a dependent child that lives with you, up to the age of 19. If the child turned 19 before the end of the tax year, you may not claim the exemption. However, the IRS extends the exemption for dependent children under the age of 24 who attend school full-time at least five months out of the year. Also, you may claim children of any age who are permanently and totally disabled. For each exemption in tax year 2012, you can reduce your taxable income by $3,800.
Adult Children Guidelines
For purposes of claiming an exemption, the IRS does not require a dependent to live with you full time if they are your your child, stepchild, foster child, or a descendant of any of these, such as a grandchild. If the individual can be claimed as an exemption on another return or files a joint return with someone else, however, you can't claim him as a dependent. An adult child dependent must have gross income of less than $3,800 a year, as of 2012, and you must provide at least half of the dependent's support in the form of housing, clothing, food and other essentials.
Residency and Social Security
The IRS requires that anyone you claim as a dependent be a citizen of the United States or a legal resident or citizen of the United States, Canada or Mexico. You must list the dependent's full name, date of birth and Social Security number; this is how the IRS verifies that the dependent meets the age guidelines and is not claimed on someone else's return. If the dependent files his own tax return, he may not claim the personal exemption for himself if you intend to claim the exemption on your own tax return.
If you itemize deductions, you may be able to claim additional deductions for spending on an adult dependent. These expenses include medical and dental; you can claim these deductions even if the IRS does not allow the exemption because the dependent earned too much income or filed a joint return with somebody else. You can deduct only that portion of medical expenses that exceeds 7.5 percent of your adjusted gross income. You may also claim the American Opportunity Credit for educational expenses for any dependent for whom you may also claim an exemption.
- TurboTax: Tax Exemptions and Deductions for Families
- CBIZ: IRS Releases Official 2012 Tax Rate Brackets, Standard Deductions, Other Inflation-Adjusted Figures
- IRS: Schedule A Instructions
- IRS: Publication 501: Exemptions, Standard Deduction, and Filing Information
- IRS: Publication 970: Tax Benefits for Education
Founder/president of the innovative reference publisher The Archive LLC, Tom Streissguth has been a self-employed business owner, independent bookseller and freelance author in the school/library market. Holding a bachelor's degree from Yale, Streissguth has published more than 100 works of history, biography, current affairs and geography for young readers.