Can I claim my adult child as a dependent?

November, 17 2022 by Karen Thomas-Brandt, EA

The last few years have brought about many changes. We experienced a pandemic, which meant quarantining and isolating, we saw prices for essential goods and services skyrocket, and, for many of us, we had adult children move back home. Because of this “boomerang generation,” many people ask, “Can I claim my adult child as a dependent?”

As with most tax questions, the answer to this question can be a little complicated. Dependent adult children (and, really, any dependent) will fall into one of two categories: Qualifying Child or Qualifying Relative. These two categories have some similarities and some differences.

Let’s start with the similarities. For your adult child to qualify to be your Qualifying Child or Qualifying Relative, the following must be true:

• The child must be a U.S. Citizen, U.S. National, U.S. Resident, or a resident of Canada or Mexico,
• You (the taxpayer) must be the only person claiming this individual as a dependent, and
• The child must not file a joint return unless they are filing just for purposes of a refund of tax withheld or estimated taxes paid.

Additionally, the following different conditions must be met, depending on whether your child is a Qualifying Child or Qualifying Relative:

For a Qualifying Child, the following must all be true:

• The child must be related to you (biological child, stepchild, qualifying foster child, sibling, half-sibling, stepsibling, or an offspring of any of the previous),
• The child must have lived with you for more than half of the tax year (some exceptions apply),
• The child must be younger than 19 years of age (or 24 years of age, if a qualifying student), at the end of the tax year, or the child must be permanently and totally disabled, and
• The child must not have provided more than half of their own support during the tax year.

Many adult children will not meet the qualifications for a Qualifying Child if for no other reason but their age. Fear not, though, as they could still be your Qualifying Relative.

For a Qualifying Relative, the following must all be true:

• The individual must have lived with you for the entire year (some exceptions apply),
• The individual must have made less than $4,400 in 2022, and
• You provided more than half of the support for the individual during the tax year.

Let’s look at a few examples of taxpayers with adult children living at home:

Example #1: Last February, Bob and Cindy’s daughter, Marcia (23 years of age, unmarried, U.S. citizen), moved back home due to some mental health issues. After taking some time off from work and re-evaluating life, Marcia decided to go back to school and pursue her Master’s degree (full-time). Marcia does have a small job (she estimates she will make about $3,000 this year). To help with costs, Bob and Cindy do not charge Marcia any rent, but they do ask her to help with running errands and doing chores around the house. Because Marcia lived with Bob and Cindy more than 6 months during this tax year, is under the age of 24 and a full-time student and does not provide more than half of her own support, Bob and Cindy can claim Marcia as a Qualifying Child on their tax return this year.

Example #2: Fed up with the crime, high cost of living, and terrible traffic, Greg and Jan’s son, Peter (20 years of age, unmarried, U.S. citizen), moved home last March from his college town. Peter has decided to take a break from college and work full-time to save some money in hopes that he will be able to move out next year. Just like Marcia’s parents, Peter’s parents don’t charge him rent but do have him help around the house with household chores. Peter estimates he will make about $35,000 this tax year. Because Peter is over 18 years of age and not a full-time student, he will not qualify as Greg and Jan’s Qualifying Child. He will also not qualify as their Qualifying Relative, as his income will be greater than $4,400. Peter should claim himself on his tax return.

Example #3: Mike and Carol’s daughter, Alice (30 years of age, unmarried, U.S. citizen), an accomplished professional ballerina, was in a terrible car accident last May. The prognosis for Alice is not good. The doctors say she will most likely be in a wheelchair for the rest of her life and will not be able to dance again. Additionally, Alice will require round-the-clock care and, most likely, will be living with Mike and Carol indefinitely. Even though Alice is over the age of 18 years and is not a full-time student, Mike and Carol can claim her as a Qualifying Child because she is permanently and totally disabled.

There are many reasons your adult child may be living with you during the tax year. Some may be living back home while they return to school, some may be back home so they can save up money for a down payment on a new house, and some may be home permanently for mental or physical conditions. Whatever the reason, you may, or may not, be able to claim that child as a dependent on your tax return.

Whether you can claim a dependent on your tax return can be complicated and confusing. Consider getting an Audit Defense Membership. With an audit defense membership, you will have the support of your own assigned Tax Professional if you find you are being audited for the dependents you claimed on your return.