Support Test For Dependents
The support test for dependents is used to determine whether a taxpayer paid enough of another individual's expenses to receive a dependency tax credit. There are several scenarios outlined below that will help you better understand how the IRS defines "support."
A taxpayer must provide more than half of the cost of a qualified relative’s support.
Exceptions to the test include multiple support agreements and children of divorced parents (see more below).
What is Support?
Consider support from all sources, including the “qualified relative’s” own funds; compare the total with amounts the taxpayer contributed. Amounts an individual receives for support aren’t considered support unless they are spent for support. To determine support, consider items like food, lodging, clothing, education, entertainment and travel, childcare, medical care, etc. Worksheet 2 in IRS Publication 501 is useful in determining the support test for dependency.
Support is not limited to necessities, nor does the amount paid for support have to be reasonable or depend on what different parents would spend to support a child. However, in one case the Court ruled differently. In Flowers, Harriet v. U.S., 52 AFTR 1383, the District Court ruled that a boat, rifle, and lawn mower were not necessities and could not be included in the support provided by the taxpayer.
Lodging as Support
For a qualified relative who lives with the taxpayer, the amount to include for lodging is the value” (FRV) of the qualified relative’s share of the home, not the actual mortgage payment, repairs, etc. “Fair rental value” generally covers maintenance (so do not add it to support); it might or might not include utilities (include utilities if rent for houses in the local vicinity usually includes the cost of utilities). For a qualified relative that lives in his/her own home, the taxpayer’s actual contributions to lodging are support, and the balance of the FRV is considered support provided by the “qualified relative.”
Example - Qualified Relative’s Home Ownership Affects Support: Blair provides $2,500 to support his father, Mr. Doats. Doats lives in his own home, which has a fair rental value (FRV) of $4,200 a year, including an allowance for utilities, furnishings, etc. Mr. Doats uses $1,500 from his savings to provide for taxes and upkeep items on his home. His total support is $6,700 ($2,500 provided by Blair and the FRV of the home, $4,200). Since Blair does not provide more than half of his father’s support, he is unable to claim his father as his dependent. Note that the $1,500, which Mr. Doats paid for taxes, etc., is not used in the calculation of support because it is considered in the FRV of the house.
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The following items are included in support:
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Certain capital expenditures, e.g., cars and home furnishings., Be careful in determining whether capital items should be included in support., Two examples in Rev Rul 77-282, 1977-2 CB 52 came to different results: (1) a car gifted by a parent to a child was regarded as support provided by the parent versus (2) the cost of a car owned by a parent and used equally by the parent and child, was not considered support provided by the parent (only the operational costs of the child’s use and paid by the parent were parental support);,
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Incarceration - For a person in a state facility due to antisocial behavior, the cost of state or agency care is support provided by the government;
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Welfare is support provided by the government;,
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Support does not include Medicare benefits;,
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Tax-exempt income such as social security, life insurance proceeds, nontaxable pensions, child support, and interest must be considered if used to provide support.,
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GI Bill benefits for tuition and allowances (2021 Pub 17, page 36).,
Timing and Calculations
Items are included in the support calculation in the year provided. It does not matter if they are actually paid for later (or earlier). Determine the total amount used for support during the year, and how much was provided by each person (e.g., taxpayer, “qualified relative” himself, other parties, government agencies). If the taxpayer provided more than one half of the total, then he/she can claim the dependency.
Designate Support
Where a single taxpayer is helping to support both parents and is having difficulty showing over half of the support for both, it may be appropriate for the taxpayer to designate the support to only one of the parents. This will overcome the 50% dependency support requirement for one of them and possibly allow the taxpayer to qualify as head of household.
To qualify for this break, the taxpayer must maintain a household that constitutes one or both of his parents' principal abode, and at least one of the parents must be the taxpayer's dependent, i.e., must individually have gross taxable income for the year of less than the personal exemption amount (or for years 2018-2025 what that amount would be if the exemption deduction wasn’t suspended by the TCJA, e.g., $5,000 for 2024, $4,700 for 2023 and receive over half of his or her support from the taxpayer. The taxpayer himself need not reside in the household he or she maintains for the parents. The home could even be a retirement home or facility.
To accomplish this, the taxpayer must be able to provide proof that the support is for one of the parents only. Otherwise, the support will be designated as a “fund” equally allocated to both. The IRS suggests a notation on a check as an acceptable designation procedure. It says, “Notations by the maker on support checks purporting to allocate funds to particular household members made payable to an individual having custody of a claimed dependent, will be regarded as evidence of actual support.” (Rev Rul 72-591, 1972-2 CB 84)
Multiple Support Agreements
When several people together provide over 50% of support, all that provide MORE THAN 10% of the support can agree about which of them will claim the dependent. Of course, the agreeing parties must also otherwise qualify to claim the dependent. The taxpayer claiming the qualifying relative’s dependency under this provision needs to attach a completed IRS Form 2120 to his/her return listing each other eligible person who paid over 10% of the support and obtain from each one a signed statement waiving their right to claim the dependency. The statement must include the calendar year the waiver applies to, the name of the qualifying relative for whom the support was provided, and the name, address and Social Security number of the person waiving the dependency. The person claiming the dependency is to retain the signed statement(s) in case the IRS later requests them; they are not to be attached to the tax return.
Example - Meeting the Support Test: Hal and Betty Norman and their young child lived in a rented home near Phoenix, AZ. Their monthly rent was $1,000, which included the cost of gas and electricity. Hal’s parents, Woody and Cyd, were retired and lived with the Normans. Woody received social security income of $8,400 ($4,000 was spent on Woody’s support, $3,500 on Cyd’s, and the remainder was deposited in savings). Woody and Cyd received no other income for the tax year.Hal and Betty paid $7,500 for food. They also paid $1,500 to Dr. Akida for Cyd’s dental expenses. In addition, Hal and Betty paid the total cost ($1,200) of a week’s vacation in New Mexico for the whole family (including Woody and Cyd). Computation of Woody and Cyd’s total support:
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| Support Item | Woody | H&B | Cyd | H&B |
| Lodging ($12,500/5) | $2,400 * | $2,400 | $2,400 * | $2,400 |
| Social Security | 4,000 | 3,500 | ||
| Food ($7,500/5) | 1500* | 1,500 | 1,500* | 1,500 |
| Dental | 1,500* | 1,500 | ||
| Vacations ($1,200/5) | 240* | 240 | 240* | 240 |
| Total | $8,140 | $4,140 | $9,140 | $5,640 |
| * Amounts provided by Hal and Betty | >50% | >50% |
Hal and Betty may claim Cyd as their dependent because they contributed over half of her support ($5,640 of $9,140). They may also claim Woody as their dependent because they contributed $4,140 (over half of Woody’s total support of $8,140).
Medical Dependent
A taxpayer can include medical expenses they paid for a dependent. To include these expenses, the person must have been the taxpayer’s dependent either at the time the medical services were provided or at the time the expenses were paid. A person generally qualifies as a dependent for purposes of the medical expense deduction if both of the following requirements are met.1. The person was a qualifying child (defined previously) or a qualifying relative (also previously defined). 2. The person was a U.S. citizen or national or a resident of the United States, Canada, or Mexico. A taxpayer can include medical expenses they paid for an individual that would have been their dependent except that:1. The person received gross income of $5,000 or more in 2024 (up from $4,700 in 2023);2. The person filed a joint return for the tax year; or3. If the taxpayer, or spouse if filing jointly, could be claimed as a dependent on someone else's return.California conforms to Federal law for the determination of dependency. California allows a nonrefundable credit for the taxpayer, spouse and each dependent. See Chapter 1.03 for the amounts.Dependents Ineligible for SSN or ITIN - For taxable years beginning on or after January 1, 2018, taxpayers claiming a dependent exemption credit for a dependent who is ineligible for either a Social Security Number (SSN) or a federal Individual Taxpayer Identification Number (ITIN) – generally, these would be nonresident aliens, including dependents who are residents of Canada or Mexico – may provide alternative information to the FTB to identify the dependent for whom the dependent exemption credit is being claimed. For each claimed dependent without an SSN or ITIN, this is done by completing form FTB 3568, Alternative Identifying Information for the Dependent Exemption