When it comes to filing your federal income taxes, there are a number of deductions you can take that will reduce the amount of taxes you owe, and possibly make you eligible for a tax refund payment. The number of dependents you have can make a large difference, but the age of your dependents only applies when you are taking advantage of specific credits and deductions. If you're not sure whether each of your dependents qualifies for a deduction on your tax return, be sure to talk to a professional licensed tax adviser or an IRS-trained counselor.
Children can be listed as dependents on your tax return from the first year they are born, as long as they have a social security number and they fit the IRS's definition of a qualified child. A qualified child can be your own, one that you've adopted or have had legal custody assigned through a foster court system. Qualified children can also be a step-child, grandchild, niece, nephew, brother or sister. A qualified child must be under the age of 19 if they're still living at home, and under the age of 24 if they're in college. A fully disabled child is a qualifying child for tax purposes regardless of how old they are.
Child Tax Credit
In order to take an additional credit on your taxes known as the child tax credit, you must have one or more children who fits the qualified child description. A qualifying child is under the age of 17 at the end of 2010, is related to you through birth or adoption, or is your step-child. The child must also be a U.S. citizen, listed on your tax return as a dependent that you supported half or more of the year, and have lived with you for at least half of the year.
Earned Income Credit
The Earned Income Tax Credit (EITC) is a separate additional credit that can be taken by individuals or families who earn low-to-moderate incomes. If you meet the income limitations and you have earned your income from a job or through self-employment, you may qualify for the EITC as long as you--and your spouse if applicable--are over the age of 25 but under 65. If you also have qualified child dependents under the age of 19, up to three of those children can increase the tax credits you receive.
A qualifying relative is a dependent of any age that meets specific IRS guidelines. Qualifying relatives may be related to you through birth or marriage, such as a brother or sister-in-law, mother, or grandfather. Qualifying relatives can also be someone who is not related to you but who lived as part of your household for the entire year and who you provided more than half of the support for during the year.
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