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Support Test

The final part of the test for dependent status requires that you provide more than half of the person's total support during the calendar year.

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In practice, most parents of minor children are assumed to provide at least half of the support. They don't need to do the formal calculations described below unless the dependent received a significant amount of income during the year and spent it on "support items" as described below.

Technically speaking, to apply the support test you must first calculate the total amount spent for the individual's support during the year, and then calculate how much of that support was provided by you (or your spouse, if filing jointly). If you provided more than half, the individual meets this test to be your dependent.

Total support for the year. The first step is to determine how much was actually spent on the individual's support during the year.

"Total support" includes amounts spent to provide food, clothing, lodging, education, medical and dental care, health insurance, recreation, transportation, and similar necessities. Other items can be included, depending on the situation. For example, if you pay someone to provide child care or disabled dependent care, you can include the payments as support even if you claim a tax credit for them.

Items not included as support are federal, state and local taxes, life insurance premiums, funeral expenses, savings and investments, and scholarships received by your child if the child is a full-time student.

Each item you provided is valued at its actual cost. In the case of lodging, the cost is determined as a portion of the fair rental value of the home provided to the dependent. The fair rental value usually includes utilities and furnishings.

Where the precise cost of the support items provided to the dependent can't be determined (e.g., the value of groceries consumed by the person is unknown), you must compute the cost of the item for the entire household in the year, and assign a proportionate share to each member of the household.

Where did the support come from? Once you know the total value of support received by the individual, you must compute how much of it was provided by yourself (and your spouse, if filing jointly) and then compare the amounts. If you provided one-half or more of the total support, the individual is your dependent under this test.

In some cases, the individual may be receiving income from outside sources such as Social Security, a welfare program, an educational institution, or other individuals. None of this income is treated as support provided by you.

If you are an employer of the individual (for example, if you hire your child to perform office work), the wages you pay are not treated as support provided by you. Also, if the individual takes out a loan and uses the proceeds for educational or other expenses, the loan proceeds count toward total support but not toward support provided by you.

However, the fact that the individual is receiving outside income does not automatically mean that it is being used to support that individual. Amounts that the person saves or invests, or spends on non-support items like life insurance, are not treated as support. This is true even if you encourage the person to save his or her own money (and perhaps to open an IRA) and you make up for the amount saved by providing a comparable amount of support.

Planning Tools

Planning Tools

You can use this dependent support worksheet to see whether a particular dependent qualifies under the support test.

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