In most cases, parents are able to claim their children as dependents on their federal taxes. However, there are exceptions to this. It is important to go through the proper process in order to determine whether your child(ren) are legal dependents in the eyes of the IRS. 

In general, a child is a qualifying child of a taxpayer if the child satisfies each of these tests: a residency test, a relationship test, a joint return test, and an age test. In addition, with one exception (see “self supporting children” below), the child may not have provided over one-half of his or her own support for the year. The support and gross income tests for determining whether an individual is a “qualifying relative” generally do not apply to a child who meets the requirements of the uniform definition.

To satisfy the residency test, the child must be  a U.S. citizen, resident or national, or a resident of Mexico or    Canada, and have the same principal place of abode as the taxpayer for more than one half of the tax year. Exceptions apply for temporary absences, when the child is born or dies during the tax year, for children of divorced or separated parents, and for certain missing children. Temporary absences due to special circumstances, including absences due to illness, education,   business, vacation, or military service, are not intended by Congress to be treated as absences.

Adopted nonresident alien exception - There are exceptions to this test for the dependency of certain adopted children who are nonresident aliens. For such a child to qualify as a taxpayer’s dependent, the taxpayer must be a U.S. citizen or national, and the child must live with the taxpayer all year. The child need not have been adopted for the entire year if he/she lived with the taxpayer for the whole year (except for temporary absences).

Residency test for kidnapped children - A child who has been kidnapped is treated as meeting the residency test if both of the following requirements are met:

If both requirements are met, the child is treated as meeting the residency test for the following tax benefits:

This treatment applies for all tax years ending during the period that the child is kidnapped. However, it ceases to apply as of the first tax year beginning after the calendar year in which the child is determined to be dead, or, if earlier, the year in which the child would have reached age 18 (age 17 for purposes of the child tax credit in years other than 2021).

To meet the relationship test, the child must be the taxpayer's son, daughter, stepson, stepdaughter, brother, sister, stepbrother, stepsister, or a descendant of any such individual. An individual who is legally adopted by the taxpayer, or an individual who is lawfully placed with the taxpayer for legal adoption by the taxpayer, is treated as a child of the taxpayer by blood. A foster child is treated as a child of the taxpayer only if the child qualifies as an “eligible foster child,” meaning that the individual was placed with the taxpayer by an authorized placement agency or by judgment, decree, or other court order.

An individual who is married and files a joint return for the tax year beginning in the calendar year in which the tax year of the taxpayer claiming the individual begins can't be a qualifying child unless the return is filed only as a refund claim. (Code Sec. 152(c)(1)(E))

The age test varies depending upon the tax benefit involved. The child is treated as reaching a given age on the anniversary of the date the child was born (e.g., a child born January 1, 2003, attains age 19 on January 1, 2022). In general, to be a qualifying child, an individual must be:

*These age requirements are as of the end of the tax year, and they don’t apply if the individual is permanently and totally disabled at any time during the calendar year.

Regardless of the individual’s age: to be a qualifying child, the individual (child) must be younger than the taxpayer who claims him or her. (Code Sec. 152(c)(3)(A)) This rule does not apply if the individual is totally and permanently disabled. (Code Sec. 152(c)(3)(B))

This provision addresses the problem where a taxpayer caring for a younger sibling in a home with no parents would be ineligible to claim the earned income credit based solely on the fact that the taxpayer is a qualifying child of the younger sibling if the taxpayer meets the age, relationship, and residency tests. Accordingly, the taxpayer would not be a qualifying child of the younger sibling and thus would not be barred from claiming the earned income credit with respect to the younger sibling.