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Is Dependents or Not Dependents


MichaelG
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My questions is, and the answer is most likely no, but I have to ask because, I have never had this asked of me yet.

Client a single person, with live in girlfriend, and two children.

Girlfriend does not work, children are not supported by biological father.

No one else claims these children on a tax return.

Client supports all of them.

Can they be his dependents?

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I disagree....under the rules of Qualifying Relative it states that a person is not considered to be the qualifying child of another taxpayer if that other taxpayer is not required to file a tax return. In Quickfinders, Page 4-5, Step 4 states that any other person who lived with the taxpayer all year as a member of the taxpayer's household is a qualifying relative. I believe that he can take all three of them as dependents if they lived with him and he supported them; and they meet all of the other rules of dependency.

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I taught a tax class this past fall, and dependents questions became our weekly thing. It was great. It is so confusing at first, but after you hammer through it 25 or 30 times, it comes together. My students went from hating dependents, to wanting some of their own! Pub 17 gives a lot of examples to review.

Yes - they are all dependents. No - he does not qualify for EIC. My students will now tell you that she should get a part time job and scrape in a couple bucks, so she can get a ridiculous EIC refund!

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>>My students will now tell you that she should get a part time job and scrape in a couple bucks, so she can get a ridiculous EIC refund!<<

Maybe you'd better hammer it through another 30 times, until they understand that a dependent can not get EIC. Also, we don't know if she is old enough to claim EIC. Most important, since tax benefits should never drive financial decisions that are otherwise untenable, we don't know if the child is old enough to avoid childcare costs exceeding income from the new job.

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Be careful of your state laws, they can effect the dependency.

Here in Michigan there is a very old law on the books that says it is illegal for a man and a woman to "co-habitate" without the benefit of marriage.... Which possibly makes their relationship illegal in Michigan.

The IRS in our district says you can't claim a deduction for anything (or anyone) that is illegal in Michigan. In Michigan the answer would be he could claim the children as a "qualifying relative" but cannot claim the girl friend.

taxtrio

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Jack,

As long as she is breathing in the same room with the children, for more than 6 months, she will qualify for single filing status and EIC, if she otherwise qualifies.

Disagree!

How much would she have to earn to show that she provides more than 50% of her living expenses as well as her children? Any less than that and she is STILL his dependent as "qualifying relative" and therefore CANNOT receive EIC.

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Disagree!

How much would she have to earn to show that she provides more than 50% of her living expenses as well as her children? Any less than that and she is STILL his dependent as "qualifying relative" and therefore CANNOT receive EIC.

As soon as she makes more than $3,700, she is NOT the qualifying relative OF ANYONE.

AND in Michigan (and maybe in other states), if she makes, let's say, $2,700, she CANNOT be the qualifying relative of her boyfriend... as a result, she could qualify for EIC, regardless who supported the children as long as the children didn't provide more than 50% of their own support.

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For a qualifying child she does not have to provide 50% of the support - see below:

Support — the person did not provide more than half of his or her own support during the year.

The new rules state that the qualifying child must not provide more than half of his or her own support. This is different from the old rules. Under the old rules, the taxpayer had to provide over half the support for the child. The change makes it easier for families relying on public assistance, charity, and gifts from family members to claim a dependent.

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