Dependency is defined in the Internal Revenue Code as having two components: 1) those individuals that are defined as dependents, and 2) the right to claim the dependency exemption for those individuals. Section 152 defines three tests that an individual must meet to be considered a dependent of the taxpayer, and Section 151 defines two additional tests that determine whether the taxpayer may claim the dependency exemption for that same individual. At times the code requires that both of these components be met to obtain certain tax benefits, and at other times only requires the less restrictive Section 152 requirements of qualifying as a dependent. Under very limited circumstances Section 151(b) permits a spouse to claim the exemption for his or her spouse.
Who is a dependent? Section 152 defines a dependent of a taxpayer as an individual that satisfies 3 tests:
1. Support over one-half must be paid by the taxpayer for a qualified individual as defined in Sec. 152(a), unless
over half of the support is deemed furnished by a multiple support agreement (Sec. 152(c)(2)), the exemption is released by the custodial parent (Section 152(e)(2)), or the exemption is obtained by a pre-1985 Agreement (Section 152(e)(4)).
A special rule exists for determining support in the case of children of divorced or separated parents and is discussed in "Special Rules for Divorced or Separated Individuals."
2. Relationship (Sec. 152(a)) of individual to taxpayer is:
son or daughter or descendant of either
stepson or stepdaughter
an individual (other than a spouse) who, for the taxable year of the taxpayer, has as his or her principal place of abode the home of the taxpayer and is a member of the taxpayer’s household (Sec. 152(a)(9))
other qualifying relative who is:
parent, grandparent, stepmother, stepfather, brother, sister, stepbrother, stepsister, in- laws, mother, father, brother, sister, son. If related by blood: aunt, uncle, nephew, niece (Sec. 152(a)(1-8)).
Note: These other eligible individuals such as brothers, sisters, aunts, uncles, are also qualifying individuals under section 152(a) but are omitted from further discussion since their consideration is not relevant to the topic of divorce or separation.
3. U. S. Citizen or resident of the U.S., Canada or Mexico (Sec. 152(b)(3))
Section 151(c) requires 2 Additional Tests to Claim the Dependent’s Personal Exemption:
1. Gross income is less than the exemption amount, unless the dependent is the taxpayer’s child who has not attained age 19 by the close of the tax year, or the child is a full-time student for each of five months during the tax year (Sec. 151(c)(4)) and has not attained age 24 by the end of the tax year (Sec. 151(c)(1)).
2. Dependent does not file a joint return if married (Sec. 151(c)(2)).
An additional exemption shall be allowed for the spouse of the taxpayer if a joint return is not made by the taxpayer and his or her spouse, if the spouse, for the calendar year in which the taxable year of the taxpayer begins, has no gross income and is not the dependent of another taxpayer.