When a relative qualifies as a dependent

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Dear Tax Talk,
I am a green card holder and my husband is a natural U.S. citizen; we file joint taxes. We opened a federal credit union savings account in my husband’s name specifically for transactions with my dad, who is a 64-year-old Mexican citizen living in a border town in Mexico and is our dependent. He does not have a job, and we support him on a biweekly to monthly basis. Can we list him as our dependent even though he does not live with us? If so, where can I find more information regarding what we need to do? Thanks in advance for the help that you can provide. 
— Ana

Dear Ana,
You can claim an individual as a dependent if he or she is a qualifying child or qualifying relative. As you can guess, your father would not be a qualifying child, so we’ll limit our discussion to the rules as they pertain to a qualifying relative.

There are four tests that must be met for a person to be your qualifying relative:

Qualifying relative test
  1. Not a qualifying child test,
  2. Member of household or relationship test,
  3. Gross income test, and
  4. Support test.

The first test is redundant, your parent is not your qualifying child. Most ancestors, descendants, siblings and other relatives do not have to be part of your household for you to claim them as a dependent. Your father passes this test based on his relationship to you; he does not have to live with you. To meet the gross income test, a person’s gross income for the year must be less than $3,500. The IRS is only concerned with U.S. gross income for this test.

To meet the support test, you generally must provide more than half of a person’s total support during the calendar year. You figure whether you have provided more than half of a person’s total support by comparing the amount you contributed to that person’s support with the entire amount of support that person received from all sources. This includes support the person provided from his or her own funds.

Provided you meet all these tests, you can claim your father as your dependent.  For the first year you claim him as a dependent, you’ll need to complete a Form W-7 and attach it together with certified copies of his identifying documents to your Form 1040. If your father already has an ITIN or Social Security Number, use that on your Form 1040 and file as you normally would. You’ll need to mail your Form 1040 to the Austin, Texas, address in the Form W-7 instructions so that an ITIN can be assigned for your father. IRS Publication 501 provides more information on claiming a Mexican national as your dependent. 

To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. Taxpayers should seek professional advice based on their particular circumstances.