Does my working teen still qualify as a dependent on my taxes?

My teens got their first jobs this year. When do they no longer qualify as dependents? Is there an income maximum they shouldn’t exceed or else it has unpleasant tax repercussions for the parent?

Whether you are the parent or the teen, landing that first job is a milestone for most families. While the younger family members are earning some money and gaining valuable experience, the parents may begin to wonder what this means come tax time.

The good news is parents can in most cases continue to claim their child as a dependent on their tax returns. In short, if the child does not provide more than half of his or her own support and does not claim him- or herself – or anyone else – as a dependent on his or her tax return.

There are a few tests that must be met in order for a dependent to be considered a qualifying child to claim an exemption:

  • Relationship: The child must be the taxpayer’s child, stepchild, eligible foster child or grandchild.
  • Age: The child must be either under the age of 19 at the end of the year or under the age 24 at the end of the year and is enrolled as a full-time student during any part of five calendar months during 2019. There is no age limit if the child is totally and permanently disabled.
  • Residency: The child must live with the parent claiming him or her for more than half of the tax year.
  • Support: The child cannot provide over half of his or her own financial support. A full-time student does not take into account taxable or nontaxable scholarship payments received in calculating the support test.
  • No joint return: If the child is married, he or she must not have filed a joint return.
  • Tie-breaker: If the child is the qualifying child of more than one person, a tie-breaker test is imposed. For instance, if both parents (who do not file married filing jointly) can claim the child, then the parent with whom the child has lived the greater portion of the year may claim him or her. For more details on this tie-breaker test, please refer to IRS Publication 501.

Please let us know if we can provide more information.

Tamra Newman, CPA, CVA, is a Tax Manager with Antares Group, Inc. She can be reached at thn@antarescpas.com.