Personal income-tax exemptions explained

Taxes 101

As you fill out your federal income tax return, even before you report your income, the IRS asks you to list your personal exemptions. It’s important not to skip this step — exemptions reduce your taxable income.

For 2009, the personal income tax exemption amount is $3,650. That’s per person, not per family. That amount applies so long as your adjusted gross income (AGI) falls under the phaseout amount. Phaseouts begin at $125,100 for taxpayers filing as married filing separately, $166,800 for taxpayers filing as single, $208,500 for taxpayers filing as head of household and $250,200 for taxpayers filing as married, filing jointly.

You are generally allowed one exemption for yourself if you cannot be claimed as a dependent on any other taxpayer’s return — whether or not the other taxpayer chooses to claim you.

If you are married filing a joint income tax return, you can claim one exemption for your spouse, even though a spouse is not considered your dependent. If you are married filing a separate tax return or as head of household, you can claim an exemption for your spouse if your spouse had no gross income, is not filing a tax return and cannot be considered the dependent of another taxpayer.

You can take one exemption for each person you can claim as a dependent, even if your dependent files his or her own tax return. A dependent is either a qualifying child or a qualifying relative.

There are six tests that must be met for a child to be your qualifying child:

1. The child must be your son, daughter, stepchild, foster child, brother, sister, half-sibling, step-sibling or a descendant of any of them. Your legally adopted child is considered your child.

2. Your child must be under age 19 at the end of the year and younger than you or a full-time student under age 24 at the end of the year and younger than you. Your permanently and totally disabled child always qualifies, regardless of age.

3. Your child must have lived with you for more than half of the year. Exceptions apply for temporary absences such as illness and travel, children who were born or died during the year, kidnapped children and children of divorced or separated parents.

4. Your child cannot have provided more than half of his or her own support for the year. Support includes basic needs such as room and board.

5. Your child cannot file a joint tax return with any other person for the year.

6. If two taxpayers believe the child qualifies as a personal exemption under the other five tests, special tie-breaker rules apply:

  • If only one of the taxpayers is the child’s parent, the child is treated as the qualifying child of the parent.
  • If both parents claim the child, but file separately, the IRS looks to see which parent lived with the child the longest during the tax year. If the child lived with each parent for the same amount of time, the IRS will treat the child as the qualifying child of the parent who had the higher AGI for the year.
  • If no parent is able to claim the child, the child is treated as the qualifying child of the taxpayer with the highest AGI for the year.
  • If no parent claims the child even though they were able to, the child is treated as the qualifying child of the taxpayer with the highest AGI if that taxpayer’s AGI is higher than that of any of the parents who could have claimed the child.
  • If all else fails, the taxpayers may be able to agree between the two of them who may claim the child.

The tests that must be met for a person to be your qualifying relative are a bit different. They are:

1. The cleverly named “not a qualifying child test.” It’s just like it says on the tin: A child is not your qualifying relative if he or she is the qualifying child of any taxpayer.

2. The relative must either live with you all year as a member of your household or be related to you in one of a number of ways; the usual suspects qualify, such as your immediate family, but the test also extends to half siblings, step siblings and in-laws.

3. The relative must not have gross income for the year of $3,650 or more.

4. You must have provided more than half of your relative’s total support during the year.

Divorce and custody agreements may affect whether you may claim a child or relative as a dependent. Make sure that you understand what those agreements say that before you sign one; it’s difficult to change later. You should know that the IRS doesn’t want to be an active participant in any arguments about dependents, so be sure to work these details out beforehand, if possible.

To actually claim a dependent as a personal exemption on your tax return, you’ll need to provide the person’s name, Social Security number and relationship. If you’re using tax preparation software or a tax professional to prepare your return, you may need to provide the birth dates of your dependents.

A family of five could qualify for up to $18,250 in personal exemptions — that doesn’t even include related deductions and credits. Be sure you understand the rules for claiming personal exemptions and don’t pay more in taxes than you have to.

This post was originally posted as part of a series on Tax Basics for AOL’s WalletPop. You can read more from WalletPop’s tax expert, Kelly Phillips Erb, here.

Comments (31) Leave your comment

  1. My friend is homeless. She has a daughter that is 12. I took her in 3/18/2013. Mom has not provided any income for her. I only have legal consent for her to live me. Washington state here…and wondering if i can claim her as she has no income also.

  2. Can I claim an exemption for my husband? He is not a US citizen, lives and works abroad so he has no US income and does not file a return in the US.

    1. Hi – A spouse is never a dependent. What you should do instead is obtain an Individual Taxpayer Identification Number (ITIN) for your spouse so you can file a joint return. The ITIN is a substitute for a Social Security Number for non-citizens who need to file a tax return. The attached link has more information. Hope it helps. –Christopher http://www.irs.gov/taxtopics/tc857.html

  3. Hi Dinah-
    Per the IRS rules, a spouse is never considered a dependent. You will still get the $3,800 exemption for him, but he is not considered a dependent. You will not be able to claim Head of Household, as that filing status is for unmarried taxpayers only. You can file jointly with your husband, or file separate returns.
    Thanks!
    Barb

  4. my husband is disabled collecting ss, i work full time. can i use him as a dependet an can i claim head of house hold on my 2012 tax return, i will be using turbo tax as i have for the past 5 years thanks.

    1. Hi Dinah-
      Per the IRS rules, a spouse is never considered a dependent. You will still get the $3,800 exemption for him, but he is not considered a dependent. You will not be able to claim Head of Household, as that filing status is for unmarried taxpayers only. You can file jointly with your husband, or file separate returns.
      Thanks!
      Barb

  5. I care for my mom and has been living with me, going on 3 years, she gets SSI, $905 monthly and is a U.S. Citizen. My husband is the only one working and we have 2 children. Do I need to charge my mom room and board and her share of utilities to be able to claim her as a dependent?

    1. Hi Karen,
      Your daughter could not be claimed as a “qualifying child”, because she would not meet the age test of being under 19 at the end of 2010, but you could claim her as a “qualifying relative” as long as she meets the support and gross income test as follows:
      -Support – you have to provide over half of her support during the year
      -Gross Income – she could not have made over $3,650 in 2010
      -She must be a U.S. Citizen, U.S. National, or Resident Alien.
      If she meets these test you can amend your tax return, but make sure she did not file and claim an exemption for herself and no one else claimed her.

      Thank you,
      Lisa Greene-Lewis

  6. Hello, I have a quailifing dependant question….I have a friend down on his luck and hasn’t worked all year due to medical problems can i claim him? He has lived with me all year and I have paid all of his living exspenses

    1. Hi Nicki,
      Yes as long as he meets the following tests:
      -You provided over half of his support
      -He did not earn over $3,700 gross income
      -He is a U.S. Citizen, U.S. National, or resident alien
      -No one else is claiming him
      Thank you,
      Lisa Greene-Lewis

  7. My 19 year old son lived with his girlfriend in the different state for the whole year. He doesn’t work but I am paying for his medical and dental insurance and sending him some money. Can I claim him as my dependent?

    1. Hi Samsone,
      He may qualify as a “qualifying relative” since he doesn’t live with you, but the main test he would have to pass is you would have to had provided over half of his support for 2011. Compare the amount of support you paid to the amount of support he received from other sources, if you provided over half of the support you can claim him as long as no one else can claim him, he made under $3,700, and he is a U.S. Citizen, U.S. National, U.S. resident alien, or resident of Mexico or Canada.
      Thank you,
      Lisa Greene-Lewis

  8. My daughter is a freshman in a college out of state can i claim the airline tickets to and from home during school breaks also can i claim hotel expenses during orientation period before school commenced, She is on a full ride scholarship i dont pay tuition except for minor expenses. What can i claim?

    1. Hi Meyi,
      Unfortunately you cannot claim travel related expenses to and from college. You would only be able to deduct eligible education expenses such as tuition paid, books, and materials directly related to her classes. You can claim her as a dependent if she is under 24 and a full-time student, as long as she doesn’t file a tax return and claim an exemption for herself and no one else claims her.

      I hope this helps you!
      Thank you,
      Lisa Greene-Lewis

  9. So, let me see if I understand this correctly. I work and my wife works. No one else claims us as dependants. We are married and filing jointly. We have one child who is one year old and is completely dependent on us (passes the dependant tests). I can claim one exemption for myself, one exemption for my wife, and one exemption for my child, for a total of three exemptions? This is before I even consider our standard deductable and/or other credits? Please respond, because your response could determine the size of my 2011 tax refund. Thank you!!!

    1. Hi Alex,
      That is correct. You can also see if you qualify for itemized deductions vs. standard deductions.

      Thank you!
      Lisa Lewis

  10. We recently moved my 88 yr old dad in with us as he has fallen several times and really shouldn’t live alone anymore. He gets SS and a small amount of retirement. My question is, will we be able to claim him as a dependent this year?

    1. Hi Gina,
      He could not be claimed as a “qualifying relative”, because he most likely would not meet the gross income test. Gross income is any income not exempt from tax and it has to be less than $3,700 for 2011. In addition, you generally must provide more than half of a person’s support. You would have to take his SS and retirement into consideration.

      Thank you!
      Lisa Lewis

  11. Hi, I start work in september 2011, my son was born March 15 2011… I have not worked all year. i want to know if i would be able to claim him as a dependent on my income tax 2012. Do you have to make a certain amount or been working a certain amount of time in order to claim. How much might i be able to get if i do claim him????????

    1. Hi Sparkle,
      First, let me apologize. I responded to your comment on 9/1, but our responses made in September were not posted due to our blog enhancements so I am redoing those responses.

      Yes, you would be able to claim him as a dependent on your 2011 tax return. You do not need to make a certain amount to claim him. Just remember you must have a valid social security number for him. You will get a deduction of $3,700 for him and depending on your income you may be able to take advantage of other credits and deductions related to having a dependent.

      Congratulations on your baby and new job!
      Lisa Lewis

  12. My mother in law wants to claim one of my children. I am married and have a 2 year old and will have a new baby in Nov. We were laid off in may and got our last check in April. My mother in law gives us dinner every night and we live in the cabin next door. We paid the electric bill as our rent every month but haven’t been able to since April. We are planning to move in the next month or two and start receiving financial aid for my husband going to school. We have already filed his fasfa for the upcoming year and states that we will be claiming both our kids. If she does this then it will screw up my husbands financial aid ect. I plan on still claiming both of my kids regardless. what will this do? Is it ok for her to do this? What should I do? Allow her to claim one? Fight it? She owes money on her taxes and that’s the only reason she wants to do this.

    1. Hi Allison,
      If you claim both of your kids then your mother-in-law cannot claim them. The IRS checks for duplicate social security numbers being used and will only allow one taxpayer to claim a dependent so you will have to come to an agreement on who claims one or both children.

      I hope this helps you!
      Thank you,
      Lisa Lewis

  13. Joanie.

    If you join an an MlM Company. Anything you do to promote or try to move the business forward will be a deduction. Please check out out blog for more tips.

  14. It should be if some is paying all of the bills in the house of the dependent and they donot contribute to the house than the big bread winner should be able to take the deductions.

  15. CONFUSED: My 21 yr old daughter who is separated from an abusive spouse, and her 2 year old (our grandchild, who was with her 365 days, 0 with father) lived with us part of the year and separate from us part of the year. Her legal address is listed as our address. We paid 75% (or more) of their living expenses and she did not work at all. She did receive state assistance part of the year (less than $3,600), but again, we still paid the majority of their expenses. Can we claim my daughter and grandchild?

  16. My 77 year old father-in-law lived with my wife and I during 2010 and had approximately $5200 in gross retirement income. This was in addition to his Social Security Benefits. Can we claim him as a dependent?

  17. A qualifying relative cannot be the qualifying child of any taxpayer. The individual must have gross income less than the amount of the personal exemption. Id. The taxpayer must have provided over one-half of the individual’s support. The allowable relationships between the taxpayer and the qualifying relative are almost innumerable, but under no circumstances can the relationship be one that violates local law.

  18. My 85 year old mother lived with my husband and me the entire of 2009. Her only income is from Social Security and a nominal amount of interest from bank accounts. She pays use $300.00 per month room and board. Can I claim my mother as a dependent on my 2009 income tax return? Do I have to claim the $300 per month as income?

  19. Is the cost of starting up a new business, as an independant rep for a network marketing company deductable?? And what about any monthly costs or advertising costs? Please help! Thanks!

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