2016 Child Tax Credit Amount

What is the 2016 Child Tax Credit Amount?

The amount of the child tax credit will change every year. Between 2015 and 2016 there no chance in the difference in the amount of the child tax credit. Further, many families with children may also be able to claim the 2016 earned income tax credit. The Child Tax Credit or also known as the CTC is worth up to $1,000 for each qualifying child for tax year 2016. This tax credit is meant to provide help to parents with qualifying children.

 

Calculating 2016 Child Tax Credit

The child tax credit has changed quite a bit since its original form. Under current IRS tax law, the child tax credit is worth up to $1,000 per child under age 17 at the end of the tax year, and is subtracted from the amount of income taxes the family owes. The 2016 child tax credit is refundable. This means that if the credit exceeds the amount of taxes the family owes, a percentage of the remaining credit is given back to the family in a refund check. This can be a big factor in the amount a tax refund that a family receives. When you receive the child tax credit back as a refund, this is known as  the Additional Child Tax Credit. A family can receive a refund worth 15 percent of earnings above $3,000, up to $1,000 per child.

 

Requirements for Claiming 2016 Child Tax Credit

In order to claim the child tax credit in 2016, a family must have more than $3,000 in earned income to claim any portion of the credit. For a family with one child, they are eligible for the credit in 2016  with incomes of $9,666 or more, families with two children when they have incomes of $16,333 or more, and for each additional child the minimum income to receive the full credit increases by $6666.

 

2016 Child Tax Credit Phaseout

However, not all families that meet this minimum income requirement can claim the childcare tax credit. The 2016 child care tax credit begins to phase out when family income reaches $75,000 for a single filer and $110,000 for couples. The phase out will allows families to claim a portion of the credit.

 

2016 Phaseout Amounts for Child Tax Credit

The amount that they can claim will depend on the amount of children that they have. It is capped at 5 percent of their income over the phase out threshold, so married couples making $130,000 ($95,000 for heads of household) with one child receive no credit at all, while families with two children are eligible for a partial payment with incomes up to $150,000 ($115,000 for heads of household) and families with more children are eligible at even higher income levels. Thus, the amount of children can really affect the credit.

 

Changes with the Child Tax Credit

President Obama has a proposal would triple the maximum allowable child care tax credit and make it available to families with higher incomes, increasing the value from $1,000 to $3,000 and the income limit to $120,000. The president’s budget would increase the EITC for taxpayers without children from $503 to about $1,000. 

 

State Child Tax Credits

Certain states have their own child tax credits that can help out certain families with children. New York and Oklahoma have state Child Tax Credits that piggyback on the federal credit. Colorado has enacted such a credit for children under age 6, but it will only go into effect when Congress enables states to tax internet sales. North Carolina and California also have state Child Tax Credits, but they are not based on a percentage of the federal credit, and New York has a second, temporary, child tax credit for 2014, 2015, and 2016 that is not based on the federal credit.

 

 

Paying Children to Make IRA Contribution

Is it legal to pay your young children for household chores to generate earned income for purposes of contributing to a Roth IRA?

I have a young son and as soon as he is able to complete household chores (laundry, taking out the trash, pulling weeds, doing dishes, washing the car, etc.) I am considering paying him reasonable amounts for each specific task (and documenting this) so he has earned income and then contributing up to his annual earned income or the contribution limit in a custodial Roth IRA for him. Even better, because I am a parent hiring my minor child, it does not appear that my son would have to pay self-employment taxes (http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Family-Help). I have Googled this and have heard conflicting advice, but the preponderance of the evidence suggests to me that this is legal. I do not plan to take any deduction for the amounts paid to my son as the work would not be for a business, but just personal expenses.

 

Paying Children to Make IRA Contribution

Can anyone advise on this and provide guidance on the specific steps (documentation/filings/etc.) that are recommended? Unfortunately I have not seen guidance on point from the IRS. The tax court cases I have read primarily address businesses attempting to take deductions for payments to children for household tasks (generally not permissible, by the way).

Firstly, are you trying to take an inappropriate deduction on your tax return? No. So they can’t accuse you personally of a falsely filed return. In that sense you are safe from a problem. Done there.

For your son, if the IRS intends to challenge it, first they could argue it was a gift. Is your son really worth what he is paid? How is this money different from any of the other things you give him a year? This could happen despite any record keeping you decide to do.

Next, if the income is going to be under the standard deduction anyway what does the IRS care? He is currently not going to pay tax. So the only real issue is if they IRS is going to assert that you are fraudulently giving your son income to avoid taxable income at retirement 50 years from now. I don’t see them putting any effort into this.

I would say you can do it. Your best defense is going to be good records, so each time a task and fee per task or hour is completed write it down in a file. I don’t think you are obligated to fill a 1099 out and report it to the IRS, but I don’t deal in those matters often. If I were guessing though, just drop it on the other income line and be done with it. These small potato issues aren’t worth more than a letter from the IRS.

However, I would be very careful with this. Let us assume that paying your son for house chores would count as earned income thus allowing him to contribute to a Roth IRA. Depending on how much you pay him over the course of the year, your son may end up owing taxes due to the limited basic standard deduction for persons claimed as dependents ($1,050 for 2015). Overall, I would recommend putting money into a 529, it would be a lot less work on your end and you wouldn’t have to worry about any legality issues.

 

 

Treating Foster Care Payments for Taxes

This information applies to taxpayers taking a foster child into your home-for reasons other than profit-and that an agency is going to make monthly payments to you for so long as you provide the foster care. Topics discussed include how you should treat those payments for tax purposes, whether you can deduct your expenses in raising the foster child, and whether there are any other tax aspects to providing foster care. There are many tax benefits to running a foster home.

 

Exclusion of the payments from the agency from your income.

You will be able to exclude the payments only if the payments are made under a foster care program of a state or local government and the agency making the payments is either part of the state or local government or is licensed or certified by the state or local government.

 

Foster Care Payments and Income Tax

Also, the agency which is placing the child with you must be either part of the state or local government or licensed or certified by the state or local government. If your foster child has no physical, mental or emotional handicaps, another requirement for exclusion is that the payments be made for caring for the child in your principal home. The payments must be made because you are paying expenses in supporting the child and not for the value of your services.

 

 

What are acceptable foster care payments?

Expenses for the support of the child include expenses for shelter, food, utilities, furniture and household incidentals, recreation, transportation, clothing, education, medical care, grooming and other personal needs and a spending allowance. If your child has a physical, mental or emotional handicap, you can also exclude from income any payments which the payor designates in writing as having been made because (and which are actually made because) the state has determined that the payments are necessary to compensate you, beyond your expenses, for additional care provided by you in your principal home because of the handicap.

 

Charitable deductions for unreimbursed expenses.

If the placing agency is a government agency or an agency exempt from income taxes and eligible to receive contributions for which the giver can get a charitable deduction, you can get a charitable deduction for unreimbursed out-of-pocket expenses paid by you for the support of the child. Support includes those expenses described above for the income exclusion.
You should keep records of the expenses to meet the general requirements for a charitable deduction and so that the purposes of the payments to you can be compared with the expenses for which you wish to take a charitable deduction. Any portion of the payments to you that doesn’t reimburse you for those expenses won’t reduce your charitable deduction, even if the portion is excludible from your income as described above. For example, say that you receive $10,000 of excludible payments from the agency, of which $4,000 is allocable to your out-of-pocket expenses for the child, and $6,000 to indirect expenses, such as the child’s share of the cost of shelter. (One way to make this allocation is by consulting the manual used by the agency that makes the payments.)

Your actual out-of-pocket expenses amount to $5,000. In that case, you will be entitled to a $1,000 charitable deduction ($5,000 # $4,000) in addition to the $10,000 exclusion. The records should include an expense journal (noting the purpose, amount, date and payee for each expense), cancelled checks and receipts. You will also need to get from the placement agency, each year before the earlier of when you file your return or the return due date (including extensions), a written statement containing a description of the service you are performing, the dates of service, a statement of whether or not the agency is providing any goods and services to you in exchange for your unreimbursed expenses and, if so, a description and good faith estimate of the value of such goods and services.

Charitable Deduction for Foster Care Expenses

To qualify for the charitable deduction, the expenses must be paid during the tax year, should be for the exclusive benefit of your foster child and shouldn’t be paid to buy or improve property in which you retain any interest. You may, however, deduct an allocable share of a collective family expense. For example, you may deduct the share of your utility bills reflecting the additional use necessitated by the foster child.

This discussion of your possible charitable deduction assumes that none of your expenses are for property, which, if you sold it, would require you to report a tax gain and that no single item of property that you contribute to your child’s support is worth more than $500. You should be aware also that there are overall limitations on the total amount of charitable deductions you are allowed for a year. They depend on the nature of the placement agency and the other organizations to which you make charitable contributions, the nature and use of any non-cash contributions which you make to other organizations and possible carryovers of deferred charitable deductions to the tax year in question.

 

Dependency deduction for foster child

You can claim a dependency deduction for a foster child for any year in which the child had same principal place of abode as you for more than half the year and didn’t provide more than half of his or her own support. It makes no difference how much income the child had, so long as the child (1) was less than 19 years of age at year-end or (2) was less than 24 years of age at year-end and was a full-time student for five months during the year.

In determining whether the child provided more than half of his or her own support, payments you receive for care of the foster child from a child placement agency are considered support provided by the agency. Similarly, payments from a state or county for foster care are considered support provided by the state or county.

 

Head-of-household filing status.

If your foster child qualifies as your dependent under the above rules, and (a) you paid more than half the cost of keeping up your home for the year, (b) you are unmarried the end of the tax year, (c) you aren’t a “surviving spouse” (that is, your spouse didn’t die in the two years before this tax year and you meet certain other requirements), and (d) you weren’t a nonresident alien at any time during the tax year, then you are entitled to file your income tax return as “head of household.”

Why Use Head of Household Tax Filing Status with Foster Children?

This entitles you to lower tax rates and a higher standard deduction than single taxpayers or married taxpayers who file separate returns.

Tax Information Related to Adoption of Children

If you adopted or tried to adopt a child in 2014, may qualify for an adoption tax credit. If your employer sponsored costs of adoption, you may be able to exclude some of the income in taxes. Here are ten things you should know about the tax benefits of adoption.

  1. Adoption Credit / Exclusion. The credit is not refundable. This means that credit can reduce your tax to zero. If the credit is greater than your tax, you can not receive an additional amount as a refund.If your employer helped pay for the adoption by a qualified adoption assistance program in writing, you may qualify to exclude that amount of taxes.
  1. Maximum Benefit. The maximum adoption tax credit and exclusion for 2015 is $ 13,190 per child.
  2. Transfer the credit. If your credit is greater than your tax, you can transfer forward unused credit. This means that if you have a credit balance in 2014, which can be used to reduce your taxes in 2015. You can do this for up to five years or until you use the credit in full, whichever comes first.
  3. Eligible child. An eligible child is under 18 years. This rule does not apply to persons who are physically or mentally incapable of caring for themselves.
  4. Qualified expenses. Adoption Expenses must be directly related to the adoption of the child and be reasonable and necessary. The types of expenses that can qualify include adoption fees, court costs, attorney fees and travel.
  5. Domestic or Foreign Adoptions. In most cases, you can claim the credit if the adoption is domestic or foreign. However, the rules include spending time which are different between the two types of adoption.
  6. A Child with Special Needs. If you adopted an eligible American child with disabilities and the adoption was finalized, a special rule applies. You could take the tax credit even if you have not paid for qualified adoption expenses.
  7. No Double Benefit. Depending on the price of adoption, you could claim both the tax credit and exclusion. However, you can not claim both the credit and exclusion for the same expenses. This rule prevents you claim both tax benefits for the same expense.
  8. Income Limits. The credit and exclusion are subject to income limits. Limits may reduce or eliminate the amount you can claim depending on the amount of your income
  9. IRS Free File. You can use IRS Free File to prepare and e-file your federal taxes for free. File theForm 8839 , Qualified Adoption Expenses, with your Form 1040. Free File is available only in IRS.gov/freefile .

IRS Rules of Gifts to Children and Gift Tax

The general income and estate and gift tax rules apply to gifts to minors as well as to adults under the eyes of the IRS. However, additional issues arise when minors are involved. An issue can arise as to whether there has been a valid gift.

 

What is Considered a Gift for IRS Purposes?

There can be a question of whether the gift resulted in an irrevocable transfer to the minor of title and dominion and control of the property. The donor might hesitate to give a meaningful amount of cash or property to a minor without limiting the child’s access. As a result, gifts to minors are often made through statutory custodians or through a trust.

 

Uniform Gifts to Minors Act or the Uniform Transfer to Minors Act

Gifts to minors are subject to the general tax rules for gifts. However, the Uniform Gifts to Minors Act or the Uniform Transfer to Minors Act, adopted by most states, provide special rules for gifts of some property to minors.A gift to a trust for the benefit of a minor provides a flexible alternative to gifts under state custodial statutes. Since the owner of property must generally report any income from the property, a donor’s gift of income-producing property transfers the tax liability on the property’s income.

 

How does the IRS treat gifts to minors?

Generally, a gift of property to a minor does not result in income to the donor or the recipient.However, a gift of property may have gift tax consequences for the donor if the amount of the gift is more than the annual gift tax exclusion and the donor has made a substantial amount of other gifts during his or her lifetime.

 

IRS Tax Treatment of Gift

The treatment of a gift of property is different from the treatment of income generated by the property. Any income produced by property that is transferred to a minor is taxed to the minor after the transfer. This is the case as long as the proceeds cannot be used to satisfy the obligations of the donor. Thus, the value of stock transferred to a minor by gift is not income to the minor, but any subsequent dividends on the stock is taxable as income to the minor. Income taxable to the minor may be subject to the “kiddie tax” . The income from an attempted “gift” of property is taxable to the donor if the donor continues to exercise control over the property and the income it generates.

 

What is Annual Gift Tax Exclusion?

Annual gifts that are excludable for gift tax purposes provide donors with a useful tool to reduce the donor’s overall estate. For 2013 through 2015, the maximum gift tax exclusion is $14,000 ($28,000 for married couples).  For 2015 and 2016, gifts of $134000 or less ($28,000 for married couples) do not have gift tax consequences.

 

What is the Uniform Gifts to Minors Act?

Gifts of property under the Uniform Gifts to Minors Act are generally not income to the donor or the minor. However, income from custodial property is generally taxable to the minor. Most states, reacting to apprehension about gifts to minors, have adopted either the Uniform Gifts to Minors Act or the Uniform Transfer to Minors Act. These uniform acts provide for gifts of some property to minors through a custodian. Many states have expanded the types of property that can be transferred to minors under the acts. Generally, the state custodial statutes allow for gifts of money, securities, life insurance policies, and annuities. In some cases, state law allows gifts of real property and other personal property.

 

State Law Affects Gifts to Minors

Under the state custodial statutes, gifts are made to minors by registering the property or fund in the name of an adult or company. The adult, usually the donor or a relative of the minor, is the custodian for the minor.  If the donor complies with the statute, the gift is irrevocable and title to the property is vested in the minor.  This treatment is different from a trust vehicle, where the beneficiary does not receive ownership of the property in the trust.

 

Tax Consequences of Custodian Accounts

The custodian is the fiduciary of the minor. Custodians are held to the “prudent person” standard—that is, a custodian must act as a prudent person would under the circumstances.  The custodian is generally authorized to use the property for the support, education, or general benefit of the minor. The custodian is required to distribute all of the custodial property to the minor when he or she attains the age prescribed by the statute. Generally, the prescribed age is 21. If the minor dies before the custodial property is distributed, the property becomes part of the minor’s estate.

Claiming Child Tax Credit 2015

The Child Tax Credit can save you money when you file taxes if you have a qualifying child. Families must have at least $3,000 in earned income to claim any portion of the credit. The refund formula means that families with one child become eligible for the full credit with incomes of $9,666 or more, families with two children when they have incomes of $16,333 or more, and for each additional child the minimum income to receive the full credit increases by $6666. Here are six things you should know about credit. 

 

Amount of Child Tax Credit in 2016

Amount of Child Tax Credit. The Child Tax Credit can help reduce the federal tax up to $ 1,000 for each qualifying you are eligible to claim on your tax son.

Additional Child Tax Credit. If you qualify and get less than the full amount of the Child Tax Credit, you may receive a refund if you do not owe taxes, the Additional Child Tax Credit.

 

Who can get Child Tax Credit?

Requirements. For this credit, the qualifying child must pass several test.

  • Proof of Age . The child must have been under 17 at the end of 2014.
  • Relationship Test. It must be his own son, daughter, stepchild, foster child, brother, sister, stepbrother or stepsister. The child may be a descendant of any of these people. A qualifying child could also include your grandchild, niece or nephew. You always treat a foster child as his own son. An adopted child includes a child lawfully placed with you for legal adoption.
  • Support test. The child must not have provided more than half of your own support during the year.
  • Dependent Test. The child must be a dependent you claim on your federal taxes.
  • Test Joint Declaration. The child can not file a joint return for the year, unless the only reason we are presenting is to claim a refund.
  • Proof of Citizenship. The child must be American, national US citizen or resident alien in the United States.
  • Proof of Residency. In most cases, the child must have lived with you for more than half of 2014.

Limitations. The Child Tax Credit is subject to income limitations. Limits may reduce or eliminate your credit depending on marital status and income.

 

What is Schedule 8812?

Schedule 8812. If you qualify to claim the Child Tax Credit, be sure to check if you must complete and attach Schedule 8812 , Child Tax Credit with your tax return. For example, if you claim a credit for a child with a Personal Identification Number Taxpayer must complete Part I of Annex 8812. If you qualify to claim the Additional Child Tax Credit, you must complete and attach Schedule 8812. Visit IRS .gov to view, download or print IRS tax forms at any time.

 

Using Form 8812 for Child Tax Credit

The American Recovery and Reinvestment Tax Act of 2009 (ARRA) lowered the minimum income that families must earn to claim the credit to $3,000, an improvement that was extended twice, most recently through 2017 in the American Taxpayer Relief Act of 2012. Without this provision, families would probably have to earn over $13,000 in 2013 to claim the credit. The Additional Child Tax Credit (ACTC) is a refundable credit that you may receive if your Child Tax Credit is greater than the total amount of income taxes you owe, as long as you had an earned income of at least $3,000. Form 1040 (Schedule 8812) efile it, Additional Child Tax Credit, is used to figure out if you qualify for the credit and to calculate the amount of the credit you will receive.

 

State Child Tax Credits

New York and Oklahoma have state Child Tax Credits that piggyback on the federal credit. Colorado has enacted such a credit for children under age 6, but it will only go into effect when Congress enables states to tax internet sales. North Carolina and California also have state Child Tax Credits, but they are not based on a percentage of the federal credit, and New York has a second, temporary, child tax credit for 2014, 2015, and 2016 that is not based on the federal credit.

 

Child Tax Credit and Additional Child Tax Credit 2015

Here’s what you need to know about the CTC, Child Tax Credit, and the refundable portion, the ACTC, Additional Child Tax Credit in 2015.  The child tax credit (as) is a non-refundable credit of up to $ 1,000 per child and additional child tax credit (as) is a refundable credit. If the amount of the taxpayer’s tax is less than the amount of the credit, the taxpayer can claim the additional child tax credit (as). To qualify for the additional child tax credit (as), Puerto Rico taxpayers must pay Social Security taxes and Medicare and have three or more children.

 

Additional Child Tax Credit in 2016

A taxpayer with income tax exempt under IRC 933 may qualify for the additional child tax credit (as) with three or more children. An employee of the United States or any federal agency in Puerto Rico may qualify for the child tax credit (as) and additional child tax credit (as). The 1040PR form is used to residents of Puerto Rico who have tax withheld Social Security and Medicare. They can file a federal tax return only to claim the additional child tax credit (as). The Form 1040 and Form 8812 is used by employees of the United States or any agency thereof to claim the additional child tax credit (as). Know that the Child Tax Credit is up to $1,000 per childup to $3,000 is refundable as ACTC

 

Qualifying Child for Child Tax Credit

  • Know who is a qualifying child in 2015. The child must:
    • Be under 17 at the end of the tax year
    • Meet the relationship and residency tests for uniform definition of a qualifying child, seeUnderstanding What is a Qualifying Child
    • Not provide more than half of his or her own support for the tax year
    • Have lived with you for more than half of the tax year (see Publication 972, Child Tax Credit, for exceptions for birth or death during the year, temporary absences, kidnapped or missing or children of divorced or separated parents)
    • Be claimed as a dependent on your return
    • Not file a joint return for the year (or filed the joint return only to claim a refund)
    • Be U.S. citizen, U.S. National or a U.S. resident alien (see Publication 519, U.S. Tax Guide for Aliens, for more information)
  • Know the limits on the credit in 2015
    • One can’t take the part of the CTC left after it reduces your tax to zero unless you qualify for the ACTC
    • The CTC is reduced if ones MAGI, modified adjusted gross income is above the amount listed below by filing status:
      • Married filing jointly – $110,000
      • Single, head of household or qualifying widow or widower–$75,000
      • Married filing separately – $55,000

 

Earned Income Tax Credit and Additional Child Tax Credit

  • Many people who qualify for the Earned Income Tax Credit also qualify for CTC and ACTC but know the important differences
    • For CTC, the qualifying child must be under age 17; the age limits for EITC are higher and there is no age limit for a child who is totally and permanently disabled
    • For EITC, the child must have a Social Security that is valid for employment but a child with an ITIN may qualify for CTC but must meet the substantial presence test, Be admitted for lawful permanent residence or make a first year election (see Instructions for Schedule 8812 for more information)

Child Adoption Qualifying child of more than one person

Draft Form 1040 instructions. Page 16 has a chart for qualifying a person as a dependent, and the rules run through page 19, including this:

 

Qualifying child of more than one person.

Even if a child meets the conditions to be the qualifying child of more than one person, only one person can claim the child as a qualifying child for all of the following tax benefits, unless the special rule for Children of divorced or separated parents, described earlier, applies.

  1. Dependency exemption (line 6c).
  2. Child tax credits (lines 52 and 67).
  3. Head of household filing status (line 4).
  4. Credit for child and dependent care expenses (line 49).
  5. Exclusion for dependent care benefits (Form 2441, Part III).
  6. Earned income credit (lines 66a and 66b).

 

Child Adoption Qualifying child of more than one person

No other person can take any of the six tax benefits just listed unless he or she has a different qualifying child. If you and any other person can claim the child as a qualifying child, the following rules apply.

If only one of the persons is the child’s parent, the child is treated as the qualifying child of the parent.

Tax Return Rejected For Child Care Expenses and Earned Income Credit EIC

Childcare Costs with Divorced Parents

Only the custodial parent gets to claim childcare costs. Like someone mentioned there’s only parent parent that claim the child since there’s an odd number of days so one of you have to decide who’s the custodial parent for that particular child.

 

Tax Return Rejected For Child Care Expenses and Earned Income Credit EIC

Whoever is the non-custodial parent should only be able to get the exemption and the child tax credit. All other tax benefits go towards the custodial parent. EIC and child dependent care credit go to the custodial parent.

The parent who the child was with longer in the year gets to claim the child for Child Care Credit and EITC. No one ever has a child half the year because there are 365 days in a year. You can either keep trying or find out exactly what she claimed because many people will do this wrong and end up screwing over the other parent.

IRS Publication 503 has more information on the matter:

 

Child of divorced or separated parents or parents living apart.

Even if you cannot claim your child as a dependent, he or she is treated as your qualifying person if:

*The child was under age 13 or was not physically or mentally able to care for himself or herself,

*The child received over half of his or her support during the calendar year from one or both parents who are divorced or legally separated under a decree of divorce or separate maintenance, are separated under a written separation agreement, or lived apart at all times during the last 6 months of the calendar year,

*The child was in the custody of one or both parents for more than half the year, and

*You were the child’s custodial parent.

 

Custodial Parent Claiming Child Credit on Taxes

The custodial parent is the parent with whom the child lived for the greater number of nights in 2013. If the child was with each parent for an equal number of nights, the custodial parent is the parent with the higher adjusted gross income. For details and an exception for a parent who works at night, see Publication 501.

The noncustodial parent cannot treat the child as a qualifying person even if that parent is entitled to claim the child as a dependent under the special rules for a child of divorced or separated parents.

 

Personal Exemptions and Death of a Taxpayer

What happens to a personal or dependent exemption that is claimed when a person dies during the tax year?

The personal or dependent exemption amount claimed by a taxpayer is not reduced because of the death of a taxpayer, his spouse, or a dependent during the tax year. For example, A child is born on December 31, 2012, and dies in January 2013. A full exemption is allowed for the child in both tax years. If your child was born alive during the year, and the dependency tests are met, you can claim the exemption.

 

 

Personal Exemptions and Death of a Taxpayer

This is true even if the child lived only for a moment. State or local law must treat the child as having been born alive. There must be proof of a live birth shown by an official document, such as a birth certificate. In order to claim the exemption, the child will need to have a Social Security number. A number is usually assigned in connection with the issuance of a birth certificate. If a number was not received, a child will need to apply for one at a Social Security office.

 

The death of one spouse will also not deprive the survivor of the right to claim the exemptions of the deceased

The death of one spouse will also not deprive the survivor of the right to claim the exemptions of the deceased. The crucial date for determining marital status is the last day of the tax year. If a spouse dies during the tax year, however, this determination is made as of the date of death.

On a topic that is somewhat related, A dependency exemption may be claimed for any child of the taxpayer, regardless of whether they qualify as a qualifying child or qualifying relative, if the child is presumed by a law enforcement agency to have been kidnapped by someone other than a member of the family and had resided at the taxpayer’s principal place of abode for more than one-half of the year before the kidnapping.

In these cases, the Internal Revenue Service Publication 501, Exemptions, Standard Deduction, and Filing Information, provides the following support for claiming a dependency exemption: