Can I Claim My Niece and Nephew on My Tax Return?

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In previous years, when you claimed a person as your dependent on your income tax return, you could claim a deduction for each individual in tax year. Beginning in 2018, this was replaced by a larger standard deduction.

You can claim nieces and nephews as dependents to take advantage of other tax benefits, but only under certain circumstances: No one else can claim them as dependents, and both your niece and nephew must be single. Depending on their age and income, you could claim them as either qualifying children or qualifying relatives. It is important to note, however, that if anyone claims you as a dependent on their income tax return, you cannot claim someone else as a dependent.

Qualifying Child or Dependent Definition

The IRS doesn’t limit qualifying children to your biological or adopted kids or stepchildren. It permits a brother, sister, half-brother, half-sister, step brother, step sister or a descendant of any of them, such as a niece or nephew to serve as qualifying children if the person lived with you in the United States for at least half of the year. If your niece and nephew are under the age of 19 (or 24 if they are enrolled in school full-time), you may claim them as qualifying children. Qualifying children must have U.S. citizenship or have become naturalized citizens., and those children who are legal residents of the U.S., Mexico or Canada qualify.

If your niece and nephew are over the age of 19 and not enrolled in full-time school, you may claim them as qualifying relatives if they meet the eligibility requirements. They must live with you all year as a member of your household and cannot have a gross income of more than $4,200. If a niece or nephew is permanently and totally disabled, monies they earn doesn’t include funds they received for performing services at a sheltered workshop, according to the IRS.

You must provide at least half of their support during the year. If any other person provided more than half of your niece’s and nephew’s support, you cannot claim them as dependents. It is possible that your niece or nephew could also help you qualify for other credits, as well as ensure your eligibility for head of household filing status.

Parent vs. Aunt or Uncle

Since only one person can claim the same child as a dependent, there is an issue if the child qualifies as a dependent for more than one person. When one of those persons is a parent, a non-parent such as an aunt or uncle is only allowed to claim the child on his or her income tax return if their adjusted gross income is greater than the parent's. If two non-parents qualify for the deduction, they must decide between them which one takes it.

Other Tax Benefits for a Niece or Nephew

Claiming your niece and nephew as dependents is not your only possible tax benefit. If you are unmarried, you may file as head of household rather than single if your niece and nephew are qualified dependents. Head of household filers may have higher incomes prior to owing tax than those filing as singles.

If a niece or nephew is under age 13 or totally and permanently disabled, you may qualify for the Credit for Child and Dependent Car Expenses. If they are under age 17 and U.S. residents or citizens, you may qualify for the Child Tax Credit. Additionally, in 2020 the government passed the CARES Act and automatically issued one-time payments of $500 per qualifying child under the age of 17.

If your income is low to moderate, you may qualify for the Earned Income Tax Credit. In 2019, if your niece and nephew are both qualifying children, you may receive the EITC if your adjusted gross income is less than $46,703 and you file as single or head of household. If you have any additional qualifying children, the limit is raised to $50,162. If you file as married filing jointly, the EITC limit for two children is $52,493 and $55,592 for three or more children.