Fact Sheet – Exemptions

 

There are two types of exemptions:

  •  Personal exemptions for taxpayer and spouse
  •  Dependency exemptions for dependents

Each exemption reduces the income that is subject to tax by the exemption amount. In 2012, the exemption amount is $3,800.

Taxpayers cannot claim an exemption for a person who can be claimed as a dependent on another tax return.

 

Overview of the Rules for Claiming an Exemption for a Dependent

  • You cannot claim any dependents if you, or your spouse if filing jointly, could be claimed as a dependent by another taxpayer.
  • You cannot claim a married person who files a joint return as a dependent unless that joint return is only a claim for refund and there would be no tax liability for either spouse on separate returns.
  • You cannot claim a person as a dependent unless that person is a U.S. citizen, U.S. resident alien, U.S. national, or a resident of Canada or Mexico for some part of the year. (There is an exception for certain adopted children.)
  • You cannot claim a person as a dependent unless that person is your qualifying child or qualifying relative.

 

 

Tests To Be a Qualifying Child Tests To Be a Qualifying Relative

1. The child must be your son, daughter, stepchild, eligible foster child, brother, sister, half-brother, half-sister, stepbrother, stepsister, or a descendant of any of them.

2. The child must be (a) under age 19 at the end of the year and younger than you (or your spouse if filing jointly), (b) under age 24 at the end of the year, a full-time student, and younger than you (or your spouse if filing jointly), or (c) any age permanently and totally disabled.

3. The child must have lived with you for more than half of the year. (There are exceptions for temporary absences, children who were born or died during the year, children of divorced or separated parents or parents who never married, and kidnapped children.)

4. The child must not have provided more than half of his or her own support for the year.

5. The child is not filing a joint return for the year (unless that joint return is filed only as a claim for refund).

6. If the child meets the rules to be a qualifying child of more than one person, only one person

can actually treat the child as a qualifying child.

See the Special Rules for Qualifying Child of More Than One Person described later to find out which person is the person entitled to claim the child as a qualifying child.

 

1. The person cannot be your qualifying child or the qualifying child of anyone else.

2. The person either (a) must be related to you in one of the ways listed under Relatives who do not have to live with you, or (b) must live with you all year as a member of your household.  (There are exceptions for temporary absences, children who were born or died during the year, children of divorced or separated parents or parents who never married, and kidnapped children.)

3. The person’s gross income for the year must be less than $3,800. (There is an exception if the person is disabled and has income from a sheltered workshop.)

4. You must provide more than half of the person’s total support for the year. (There is an exception for multiple support agreements, children of divorced or separated parents or parents who never married, and kidnapped children.)