 Income tax 2022-2023. Who qualifies as your dependent questionnaire? Let's do some wealth preservation with some tax preparation. Before jumping into the questionnaire, let's first just take a quick look at the form 1040 to see where the dependents would be recorded. They're going to be down here under the dependents. Typically, we'll have the name, social security number, relationship, and then checking off if they qualify for the child tax credit or the credit for other dependents. Support Accounting Instruction by clicking the link below, giving you a free month membership to all of the content on our website broken out by category, further broken out by course. Each course then organized in a logical, reasonable fashion, making it much more easy to find what you need than can be done on a YouTube page. We also include added resources such as Excel practice problems, PDF files, and more like QuickBooks backup files when applicable. So once again, click the link below for a free month membership to our website and all the content on it. That's the first thing that will typically be coming to mind when you're thinking about the dependent, what's the benefit of the dependent usually child tax credit or other dependent credit. But there could also be an impact on a change to the filing status, possibly moving someone up from single to head of household. If I go to page two, there could possibly be a change in the tax tables being used if there was a change to filing status such as single to head of household. But mainly we're talking here line 19, the child tax credit or credit for other dependents. Now normally, it's pretty straightforward to see whether someone is going to be qualifying as a child because if it's a young child, then obviously you would think that they would be a dependent fairly straightforward, but you can imagine situations where there's going to be gray area, a lot of situations in which case, you might want to go through the formal questionnaire. Now as we think of the formal questionnaire, we usually think first in terms of a qualifying child and does the child then qualify for the child tax credit because that is going to be usually the most beneficial component. And then if they don't qualify for the child tax credit, do they qualify for the other dependents? So then that's going to be the format of the questionnaire. So let's jump on over to the questionnaire here and you can see the general kind of questions will be one, do you have a qualifying child? We're going to go through those basically questions. Step two, is your qualifying child, is your qualifying child your dependent on question number two? And then question number three or step three, does your qualifying child qualify you for the child tax credit or credit for other dependents? So if they're qualifying child, then do they qualify to give you the biggest benefit, which is going to be the child tax credit? If not, then they're going to default to the other dependents credit. Four, is your qualifying relative your dependent? So now we're moving from qualifying child to a qualifying relative and asking if they're dependent, basically forfeiting the whole concept of getting the child tax credit, basically moving to see whether we qualify for the other dependent credit. Step five, does your qualifying relative qualify you for the credit for other dependents? And then you've got your definitions and whatnot down below. So you can see the structure of this qualifying child versus other dependent. When they're qualifying child, the question is, do they qualify you for the child tax credit, which will be more beneficial? If not, other dependents, if they're not a qualifying child and they're an other dependent, then the only thing you're looking to get then from a tax standpoint would be the other dependent. Okay, let's go into it in more detail. So step one, do you have a qualifying child? So a qualifying child is a child who is your son, daughter, stepchild, foster child, brother, sister, stepbrother, step sister, half brother, half sister, or descendant of any of them. For example, your grandchild, niece or nephew. So it's kind of like a relationship test quite broad there and under age 19 at the end of 2022 and younger than you. So obviously, they would normally be younger than you, you would expect unless there was an unusual situation or your spouse if filing jointly. So we're really usually looking at this threshold of under 19. But it or it moves up to 24. So under age 24 at the end of 2022, a student, which is defined later and younger than you. So we've got the threshold of being 19. But that 19 pushes up to 24 for a qualifying child if they're a student. And then of course, we'll have to look in the definition of what qualifies for a student because we could get into the weeds in terms of the gray area as to whether they qualify for that. So or any age and permanently and totally disabled. So if they're totally disabled, then the age requirement is removed. And who don't provide over half their support for 2022. So that could be like the support test. If you want more questions about the support test, you can see publication 501. But basically you provide more than half of the support and who isn't filing a joint return for 2022. So usually, obviously, if they were filing a joint return, they wouldn't usually be a dependent of yours because now they're filing as a joint return because they're married or something like that. But there could be an exception to that rule or is filing a joint return for 2022 only to claim a refund of withheld income tax or estimated tax paid. So if you have that exception, you can take a look at publication 501 for that. So again, general age rule 19 pushes up to 24. If they're a student, that's the age test. And then do you provide the support test? In essence, you provide over half the support for 2022. And then the filing test, do you know, they don't file a joint return if they file a joint return normally, that would be non, you know, then they refine married filing joint and who lived with you for more than half of 2022. So if the child didn't live with you for the required time, you can see exceptions to time to lived with you. So now they lived with you for more than half of 2022. So you've got the support test and the lived with you test here. And the exceptions could include things like, well, what would happen if they were at a medical area or getting treatment or something like that? Does that account for them living with me for more than half of 2022? Caution, if the child meets the conditions to be a qualifying child of any other person, other than your spouse if filing jointly for 2022 C qualifying child of more than one person later, you can imagine situations where you have a joint custody situation where it's like, okay, now this child actually qualifies for two individuals here. And so what do I do in that situation? So you can we could dive into the weeds of that particular situation, but we won't right now. So do you have a child who meets the conditions to be your qualifying child? So given those questionnaires, if the answer is yes, then we go to step two. If no, then we go to step four. So if yes, then we want to move forward and say, do we qualify now for the qualified child tax credit or for the other dependent credit for the qualifying child? If they don't qualify then and I say no here, then we're going to say, do they qualify for an other dependent, possibly getting the lower credit in that case? Step two, is your qualifying child your dependent? So one, was the child a US citizen, US national, US resident alien, or resident of Canada or Mexico? If there's questions on that, you can see publication 519. So the definition of a US national or US resident alien, if the child was adopted, see exception to the citizen test later. If yes, then we continue. If no, they can't claim the child as a dependent. So we'll assume yes, was the child married? So yeah, if yes, see married person later, if no, then we're going to continue. Typically we would assume they weren't married, because if they were married, then they wouldn't be dependent because they would be filing a married filing joint return, we would assume normally. So could you or your spouse of filing jointly be claimed as a dependent on someone else's 2022 return? If the person who claimed you on their 2022 return is not required to file and isn't filing a 2022 tax return or is filing a 2022 return only to claim a refund withheld an income tax or estimated tax paid, check no. So obviously it would muddy the water a bit if you yourself were going to be able to be claimed by someone else as a dependent. So because you would think that if someone is a dependent of yours, then normally you wouldn't be a dependent of someone else, right? So that would again be another kind of somewhat more unusual type of situation, although obviously that would could happen will happen in life a lot. So if yes, stop, you can't claim any dependents complete the rest of form 1040. If no, so you can claim this child as a dependent, meaning you can't be claimed as anyone else as a dependent. So then you're here complete columns one through three of the dependent section on page one of form 1040 or 1040 SR for this child, then go to step three. Okay, step three then is going to tell us whether or not we're going to get this credit, the more beneficial credit or even though they're a child, they don't they could possibly not qualify for the child tax credit. So does your qualifying child qualify you for the child tax credit or credit for other dependent dependent? So now they're a child or qualifying child, not an other dependent, but they still have to meet the qualifications to get the bigger credit or else we still get the smaller credit. If they're not a qualifying child, then the only possible benefit in terms of credits we can get would be the smaller dependent credit, not the child tax credit. Okay. Number one, did the child have a social security number an itin or adoption taxpayer identification number and a 10 issued on or before the due date of your return, including extensions? Answer yes, if you are applying for an itin or a 10 for the child on or before the due date of your tax return. So we would assume yes there, if no, then the IRS doesn't know who this child is and they're not going to be able to identify them. You're not going to get a credit because you have to have a number, you have to be a number for people to the IRS. So was the child a US citizen, US national, a US resident alien, you could see publication 519 for the definition of US national and so on. If yes, then we'll continue. If no, you can't claim the child due to that factor. Okay. And then we're on number three. Was the child under age 17? Note, this is a different age requirement because we saw before to qualify for the qualifying child, the age to be a dependent, right? Is the child a dependent? We had the age test of 19 pushed up to 24 if they're a student. A student? A student? Yeah. They qualify for the code, but here we're talking about whether they qualify. They are now, we're saying a qualifying child to be claimed as a dependent, but there's another age test in terms of whether you're going to get the bigger credit, which is going to be the child tax credit versus the other dependent. So that's 17. So was the child under 17 at the end of 2022? If yes, then you continue. If no, then you can claim the credit for other dependents for this child. Check the credit for other dependents box. So once they're past 17, you might as well kick them out of the house because you only get like $500 for them at that point in time, right? But no, no, any gifts. That's that. So that's that one. And then, so number four, did the child have a social security number valid for employment issued before the due date of your 2022 return, including extension, see social security number later. If yes, you can claim the child tax credit for this person. Check the child tax credit box in column four of the dependent section on page one to form 1040 1040 SR for this person. If no, you can claim the credit for other dependents for this child and so on and so forth. And then, so then we're going to go down and say number four, which we would bounce, we would have bounced down to if the child was not a qualifying child. So that was member of the first step where they are qualifying child. If it came out to be no, then the question is, well, are they still a qualifying relative that could still possibly allow us to get a credit for the lower credit, not the child tax credit, but the other dependent credit. So now they're not a qualifying child, but maybe they could still qualify here. So then we're bounced down to number four, a qualified relative as a person who is your son, daughter, step child, foster child, or descendant of any of them. For example, your grandchild or brother, sister, half brother, half sister, or a son or daughter of any of them. For example, your niece or nephew, or father, mother, or an ancestor or sibling of either of them. For example, your grandmother, grandfather, aunt, or uncle, or stepbrother, stepsister, stepfather, stepmother, son in law, daughter in law, father in law, mother in law, brother in law, or sister in law, or any person, any other person, other than your spouse who lived with you all year as a member of your household if your relationship didn't violate local law. If the person didn't live with you for the required time, see exception to time lived. So quite broad of an array here on the array of people. So and who wasn't a qualifying child. So obviously if they were a qualified child, they would be up above and we wouldn't be dealing, we wouldn't be down here in step number four in the first place. If any taxpayer, so for this purpose a person isn't a taxpayer if the person isn't required to file a U.S. income tax return and either doesn't file such a return or files only to get a refund, I'm gonna get a refund of withheld income tax or estimated tax. You could see publications 501 for details and who had gross income less than 4,400 in 2022. So here's the kicker. Here's the one that often disqualifies oftentimes because that's a pretty low income threshold, right? So before we saw we saw like a support test, you're giving half the support to them. But here you've got this income test. So which is quite low. So you would expect that that could be like if they had W2 income or something over 4,400 than they that could disqualify. So if the person was permanently and totally disabled, see exceptions to gross income test in that case and for whom you provided over half the person's support. So now you've got this seems kind of redundant redundant perhaps here because they say you have to have provided over half their support and you would think if they were your dependent and they made under 4,400 and they were living with you, you know that you kind of would in that case. But maybe there are multiple people providing support and so on. So now we've got these two tests, the low income test and half the support, the support test, but see children of divorced or separate parents, multiple sport agreements and kidnapped child later. So there's always these strange kind of exceptions to those rules. Does any person meet the condition in your qualifying relative? So if yes, if they meet those conditions, we move on. If no, we stop. So was your qualifying relative a US citizen, US national, US resident alien or a resident of Canada or Mexico? So you can see publication 519 for more detail there. If yes, move on. If no, you can't claim this person as a dependent. So we'll assume yes. Assuming you'll say yes, we're going to assume yes here. So then moving on, was your qualifying relative married? So if yes, see married person later. If no, so if they were married, you would expect they would file a married filing joint return typically. So typically we would be normally be thinking no and moving on. I could number four, could you or your spouse have filing jointly be claimed as a dependent on someone else's 2022 return? So again, if you're claimed as a dependent or could be claimed as a dependent on someone else's return, then it would seem kind of unusual that someone's the dependent of yours. Although again, you could see how that could happen and whatnot. So if yes, you can't claim any dependents, complete the rest of the form. If no, you can claim this person as a dependent complete lines one through three of the dependent section on on page one of form 1040. And number five, does your qualifying relative qualify for the credit for other dependents? So if they meet the test to be a dependent, then you would expect that normally they would qualify for the qualified dependent credit, but you could have some exceptions there, right? So you could have weird situations where maybe the dependent will still be claimed and give you some benefit possibly from like a filing status situation, but not actually qualify for the credit or something like that. So do they qualify for the credit? Number one, did your qualifying relative have a social security number and ITIN and ATIN issued on or before the due date of your 2020 run return, including extensions? Answer yes, if you are applying for an ITIN or ATIN for the qualifying relative on or before the return due date. If yes, continue. If no, you can't claim them. Number two, was your qualifying relative a U.S. citizen, U.S. national or U.S. resident alien? See publication 519 for more detail. If yes, you can claim the credit for other dependents for this dependent. Check the credits for other dependents box and column four of the dependent section, page one of the form 1040. If no, you can't claim the credit. So there we go. There's the general kind of questionnaire. Hopefully, you know, if you're doing this in practice, then sometimes it's pretty straightforward. If someone's going to be a credit and whether they're going to qualify for the child tax credit or the other dependent credit, sometimes it gets kind of messy. It's it's messy and you it could help to go through a formal questionnaire like this to answer that type of question. Sometimes the software is often useful to kind of help you out with that type of question to answer the question. And even after going through the questionnaire, you could see situations where there could be still great areas such as to someone qualify as a student in terms of what they're doing in order to be a qualifying child and that kind of stuff. And questions in terms of joint custody type of situations where a child possibly could qualify for two parents and whatnot. And then you've got separation agreements and custody agreement kind of situations, which is another area that you can kind of imagine often having to dive in the weeds on.