Uniform Definition of "Qualifying Child"

Beginning in 2005, one definition of a “qualifying child” applies for each of the following tax benefits:

• Dependent exemption

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• Head-of-household filing status
• Earned Income Credit (EIC)
• Child tax credit (CTC)
• Credit for child and dependent care expenses

This definition applies to 2005 tax returns – the returns that were due on April 15, 2006 – and forward.

Before 2005, the Internal Revenue Code defined “child” or “qualifying child” in several different ways depending on the benefit claimed. Each tax benefit had its own set of tests to determine whether or not a child was a “qualifying child” for that particular tax benefit. This practice added to the complexity of the tax code and made it very difficult for taxpayers to complete their own tax returns.

Beginning with the 2006 filing season, we use four basic tests to determine if a child is a “qualifying child”. Some variations still exist from one tax benefit to another, but the variations are less confusing because they are described in reference to the four basic tests.

In general, all four tests must be met to claim someone as a qualifying child.

The Four Tests

1. RELATIONSHIP TEST. The child must be your: child, brother, sister, stepbrother, stepsister, or a descendent of one of these relatives (nieces, nephews, grandchildren, etc.) Adopted children and foster children are included in the definition of child.

An adopted child includes a child lawfully placed with you for legal adoption even if the adoption is not final.

An eligible foster child is any child who is placed with you by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction.

2. AGE TEST. The child must be under a certain age (depending on the tax benefit) at the end of the year to be your qualifying child.

Tax Benefit	Age
Dependency Exemption	19*
Head Of Household	19*
EIC	19**
Child Tax Credit	17
Child & Dependent Care Exp	13**

* 24, if the child is a full-time student.
** Any age, if totally & permanently disabled.

A student is any child who, during any 5 months of the year:

• Was enrolled as a full-time student at a school, or
• Took a full-time on-farm training course given by a school or a state, county, or local government agency.

A school includes a technical, trade, or mechanical school. It does not include an on-the-job training course, correspondence school, or night school.

3. RESIDENCY TEST. The child must live with you for more than half of the year. Temporary absences for special circumstances, such as for school, vacation, medical care, military service, or detention in a juvenile facility count as time lived at home. A child who was born or died during the year is considered to have lived with you for the entire year if your home was the child's home for the entire time he or she was alive during the year. Also, exceptions apply, in certain cases, for children of divorced or separated parents (see below) and parents of kidnapped children.

4. SUPPORT TEST. The child cannot have provided over half of his or her own support during the year.

For purposes of the EIC only, the support test does not apply. Only the Age, Relationship, and Residency tests apply as in earlier years.

Qualifying Child Of More Than One Person

Sometimes a child meets the tests to be a qualifying child of more than one person. However, only one person can treat that child as a qualifying child. If you and someone else (other than your spouse if filing jointly) have the same qualifying child, you and the other person(s) can decide who will claim the child. If you cannot agree on who will claim the child and more than one person files a return using the same child, the IRS may disallow one or more of the claims using the tie-breaker rule.

Tie-Breaker Rule

If only one of the persons is the child's parent, then the child will be treated as the qualifying child of the parent.

If both persons are the child's parent, then the child will be treated as the qualifying child of the parent with whom the child lived for the longer period of time.

If the child lived with each parent for the same amount of time, then the child will be treated as the qualifying child of the parent with the higher AGI (adjusted gross income).

If none of the persons are the child's parent, then the child will be treated as the qualify-ing child of the person with the highest AGI.

Special Rules for Separated or Divorced Parents

Separated parents and the Earned Income Credit (EIC). Parents who are separated (but not divorced) and who file as “married filing separately” cannot claim the Earned Income Credit. To claim the EIC, they must file as “married filing jointly.” Another possible option for claiming the EIC is to file as “head of household.” But to do this, you must meet these tests:

1. You must have lived apart from the other parent for at least 6 months of the tax year.
2. Your child must have lived with one of you for more than half the year.
3. You must have paid more than half the cost of maintaining the household during the tax year.
4. You must be able to claim the child as a dependent.

Divorced parents and the Child Tax Credit (CTC). Where a non-custodial parent is permitted to claim the child as a dependent by a divorce or separate maintenance agreement or judgment, that non-custodial parent may also claim the CTC. (The custodial parent must sign IRS Form 8332, “Release of Claim for Child of Divorced or Separated Parents,” and this signed form must be attached to the tax return of the non-custodial parent.

IMPORTANT NOTE: This does not change the fact that only the custodial parent (if otherwise eligible) can claim the Earned Income Credit. See “The Four Tests” above.

More information about the Earned Income Credit

Notice © Pine Tree Legal  Assistance March 2007 Sometimes the laws change. We cannot promise that this information is always up-to-date and correct.  If the date above is not this year, call us to see if there is an update. We provide this information as a public service.  It is not legal advice.  By sending you this information, we are not acting as your lawyer.  Always consult a lawyer, if you can, before taking legal action. Please review our full terms-of-use agreement

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