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Dear Tax Talk,
My parents recently migrated (as permanent residents) to the U.S. on July 21, 2015. Can I claim them as my dependents for tax year 2015, even if they have not been in the U.S. for the whole year, assuming I meet the rest of the requirements (providing 50% of their support, etc.)? What are all the rules for claiming parents as dependents? Thank you.
Yes, even though they were only U.S. residents for part of the year, you may claim your parents as dependents as long as you satisfy all of the other dependency requirements for your parents, who fall under the category of “qualifying relative.”
The 5 requirements are as follows:
1. Support test: You must provide more than half of the support of the claimed dependent. Support includes food, lodging, clothing, education, medical and dental care, recreation, transportation and other necessities.
2. Gross income test: The person claimed as a dependent must have gross income of less than $4,000, which is the personal exemption amount for 2015.
What if siblings also provide support?
Special consideration must be given to multiple support agreements. This is an agreement signed by 2 or more taxpayers who provide financial support for the same dependent. A multiple support agreement allows several persons who jointly support a single dependent to take turns claiming this person as a dependent on their tax returns. This is reported in detail on Form 2120, which is filed along with your tax return.
3. Member of household relationship test: The person claimed as a dependent must be related to the taxpayer in a specific way (e.g., the natural or adopted child or parent). A parent or child does not have to live in the same household as long as other criteria are met.
4. Joint return test: The person claimed as a dependent generally must not file a joint income tax return with another unless the only reason to file the return is to obtain a full refund of tax withheld.
5. Citizen/residency test: The claimed dependent must be a citizen, national or resident of the United States or a resident of Canada or Mexico at some time during the calendar year in which the tax year of the taxpayer begins.
In addition to these 5 tests, an individual must not be claimed as a dependent on another person’s return. For example, a parent cannot claim a personal exemption for himself.
Dependency exemption rules are complicated, so review IRS Publication 501 and talk to a tax adviser before staking your claim. And don’t forget that your dependent may need to file a tax return, as well. Welcome to your parents, and good luck!
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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.