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

by W D Adkins
Claiming a niece and nephew as dependents cuts your tax bill.

Providing support for a niece, nephew or other relative is likely to be an expensive project. The harsh reality is that, no matter how willing and committed you are to helping, the bills can strain your budget. If you can claim a niece or nephew as a dependent, you stand to reap tax benefits to help offset the cost and that may add up to thousands of dollars.

Basic Dependency Tests

Nieces and nephews may be dependents as children or adults, but the qualifying rules are somewhat different for each age group. All dependents must pass some basic tests. A qualified dependent of any age has to be a United States citizen, resident or national. Residents of Mexico and Canada are also eligible. You can't claim a niece or nephew who is married and files a joint tax return as a dependent. You must be the only person claiming your niece and nephew as dependents.

Qualifying Children

You can claim your niece and nephew if they are under the age of 19 and satisfy the IRS rules for qualifying children. Full-time students are also eligible if they are under age 24. Qualifying children must also fall into specific relationship categories. Qualifying children include, for example, your own kids, stepchildren, siblings or nieces and nephews. A qualified child must live with you for at least half of the year. In addition, your niece and nephew may not furnish more than half of their own support.

Adult Dependents

Even if your niece and nephew are too old to be qualifying children, you may still be able to claim them as dependents if they meet IRS tests as adult dependents. You have to be the only person claiming them as dependents. They can work, but you must provide more than half of their support. Adult dependents must live with you for the entire year.

Benefits to Look For

When you claim nieces and nephews as dependents, you get a dependent exemption for each. As of 2013, one dependent exemption allowed you to take $3,900 off your taxable income. That can translate into a sizeable tax saving. For instance, if your highest tax rate is 28 percent, one dependent exemption saves you $1,092. You may also be eligible to claim tax credits like the Child Care Credit, Earned Income Tax Credit and other credits to help pay for education and child care.

About the Author

Based in Atlanta, Georgia, W D Adkins has been writing professionally since 2008. He writes about business, personal finance and careers. Adkins holds master's degrees in history and sociology from Georgia State University. He became a member of the Society of Professional Journalists in 2009.

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