Claiming a dependent on your tax return can save you some money on your income tax bill and may even allow you to claim other benefits that are unavailable to taxpayers without dependents. However, this doesn’t allow you to claim every deductible expense your dependent incurs, including the charitable contribution deduction. Only the taxpayer who actually makes the donation can take a deduction for it on his personal tax return.
Charitable Deduction Requirements
The charitable contribution deduction imposes a number of requirements that all taxpayers must satisfy before they are eligible to claim it, including dependents. The Internal Revenue Service will disallow your deduction unless you make the donation to a tax-exempt entity. The agency requires all nonprofit organizations to apply for tax-exempt status and await IRS approval before they can begin accepting tax-deductible donations from the public. Therefore, it’s important that you reference IRS Publication 78 before reporting your deduction to ensure that the organization is tax-exempt.
Dependent Tax Returns
A dependent has the same obligation as other taxpayers to evaluate whether the filing of a tax return is necessary each year. However, the criteria used for making this determination are different. Since a dependent cannot claim a personal exemption on his return, the IRS requires that he file a tax return in any year his gross income exceeds the standard deduction for the single filing status.
In contrast, it’s not necessary for you to file a tax return unless your gross income is equal to or greater than the sum of your standard deduction plus one personal exemption. Moreover, your dependent has the option to itemize deductions on her return and claim the charitable contribution deduction. But if she has insufficient gross income to warrant a tax filing, you cannot claim the deduction on her behalf.
Qualifying Relative Deductions
If you claim your dependent as a qualifying relative, it’s impossible for him to ever deduct a charitable contribution. This is because the qualifying relative rules require that your dependent not receive $3,650 or more of gross income during the tax year. Therefore, a qualifying relative dependent will never have sufficient gross income to require the filing of a tax return. But if she files one anyway, no additional tax savings will result from itemizing and claiming the charitable contribution deduction.
Qualifying Child Deduction
When you claim a dependent pursuant to the qualifying child rules, the IRS requires that the child not provide more than half of his own financial support and that he resides with you for more than half the tax year. Although this still doesn’t allow you to deduct your dependent’s charity donations, it doesn’t preclude him from claiming the deduction on his own tax return. However, the reality is that most qualifying child dependents will not incur a sufficient amount of deductible expenses to itemize deductions. There are always exceptions, but in most cases, the same financial circumstances that qualify her to be your dependent will also preclude her from itemizing and deducting charitable donations.
- IRS: Publication 526 -- Charitable Contributions; January 2011
- IRS: Publication 501 -- Exemptions, Standard Deduction, and Filing Information
- IRS: Publication 929 -- Tax Rules for Children and Dependents
- Internal Revenue Service. "Publication 501, Dependents, Standard Deduction, and Filing Information." Accessed Feb. 15, 2020.
- Internal Revenue Service. "Publication 501, Dependents, Standard Deduction, and Filing Information," Page 10. Accessed Feb. 15, 2020.
- Internal Revenue Service. "Publication 501, Dependents, Standard Deduction, and Filing Information," Page 22. Accessed Feb. 15, 2020.
- Internal Revenue Service. "Publication 550, Investment Income and Expenses (Including Capital Gains and Losses," Page 13. Accessed Feb. 15, 2020.
- Internal Revenue Service. "Publication 501, Dependents, Standard Deduction, and Filing Information," Page 5. Accessed Feb. 15, 2020.
Jeff Franco's professional writing career began in 2010. With expertise in federal taxation, law and accounting, he has published articles in various online publications. Franco holds a Master of Business Administration in accounting and a Master of Science in taxation from Fordham University. He also holds a Juris Doctor from Brooklyn Law School.