Dependency deduction

Barry Dolowich for the Monterey Herald writes: Question:  My son turned 24 during 2014 and is a graduate student at Berkeley. He is also completely financially dependent on me. I pay all his tuition and most of his living expenses. He works part time and earns about $5,000. Will I be able to claim him as a dependent on my 2014 tax returns?

A For 2014, the deduction to arrive at taxable income for each dependency exemption is $3,950.

Five tests must be met before an exemption for a dependent is allowed:

1. The child must be younger than the taxpayer, must be under age 19 at the close of the calendar year or a full-time student under age 24 at the end of the calendar year;

2. Over half of the dependent’s total support for the calendar year must have been furnished by the taxpayer. Please note that untaxed income is included in this test (tax-free income, nontaxable Social Security benefits, etc.);

3. The dependent must be an immediate family member (son, daughter, mother or father) or an ancestor of either the mother or father. Adopted children, “step” relatives, in-laws and half-blood relations may also qualify as dependents. Additionally, a person who, during the taxpayer’s entire tax year, lives in the taxpayer’s home and is a member of the taxpayer’s household may also be claimed as a dependency exemption;

4. The dependent must not have filed a joint return with his or her spouse; and

5. The child must have the same principal place of abode as the taxpayer for more than one-half of the year.

There are other ways to have your son qualify as a dependent. However, he would need to earn less than $3,950 (the 2014 exemption amount). Because your son reached age 24 during 2014 and he earns more than $3,950 per year, you will not be able to claim him as a dependent regardless of your financial support.

Please note that there are special rules for claiming exemptions for children of divorced parents and children who share the cost of supporting their parents.