Adult children as dependents

[curiousgeorge]

Adult children 'underemployed' making very little income; mother almost supports them fully (including rent - they live in separate apartments- , food, health insurance, etc). Their income is a little above the filing requirements so they have to file tax returns. But can they be claimed as dependents by mother?

[henryclay]

If the "dependent" is over 18 years of age, (or over 23 years of age for dependents who are students), and has more than one exemption in gross income, ($3,650 for 2010), they can not be claimed by anyone as a dependent.

Gross income is defined as all incomes before deductions. For instance a 25 year old person lives with his parents and has $4,000 in rental income from a property he inherited from someone, , , say a gransdparent. The rented property is free and clear of debt. Depreciation, taxes and insurance combine to total $1,000 so that the actual income is $3,000.

The figure to use is $4,000 and in this case no one can claim him as a dependent.

Tax exempt income such as social security benefits and disability incomes are not computed in the gross income test, however they must be included when determining whether the person qualifies as a dependent. If the person provides over one half of their own support they are not eligible to be claimed as a dependent by anyone else.

There are exceptions for permanently disabled children over 18 years old if their incomes are derived from work in sheltered workshops for the disabled.

For further guidance see page 15 of the instructins for Form 1040 at:

www.irs.gov/pub/irs-pdf/i1040.pdf

and page 17, (lower left hand corner), of IRS Publicatin 501 at:
www.irs.gov/pub/irs-pdf/p501.pdf

[commentator]

Apr 8, 2011 13:07:00 GMT -5 curiousgeorge said:

Adult children 'underemployed' making very little income; mother almost supports them fully (including rent - they live in separate apartments- , food, health insurance, etc). Their income is a little above the filing requirements so they have to file tax returns. But can they be claimed as dependents by mother?

<Emphasis added>

Unfortunately, if each has enough income that filing is required, then each makes much more than the $3,650 henry referred to.