Here's where things get a little more confusing. In the eyes of the IRS, your child can be a qualifying relative even if he or she is not a qualifying child. However, your child cannot be both a qualifying child (to you or anyone else) and a qualifying relative.
You can claim your adult child as a qualifying relative only if the child meets all of the following conditions:
- The adult child must be your child, stepchild, foster child or a descendant of any of those.
- Or he or she can be your brother, sister, half brother, half sister, stepbrother or stepsister; your niece or nephew; or your son-in-law or daughter-in-law.
- The child must have a gross income of less than $3,650 for the year.
- You must have provided more than half the person's total support for the tax year.
Note that an adult child meeting the relationship criteria above does not necessarily need to live in your home to qualify as your dependent: If you provide more than half his or her total support for the year, and he or she earns less than $3,650, you may still be able to claim them.
If, despite your wallet's proven tendency to leak $20 bills whenever your grown child is within a 3-mile radius, your situation does not satisfy the tests for either qualifying child or qualifying relative, you will not be able to claim your child as a dependent on your tax return. However, you may still be able to deduct the cost of health insurance premiums for adult children up to age 27, even if those children do not qualify as dependents. Check with your tax preparer or the IRS Web site for details.
If your child does meet one test or the other, read on to see if you pass the three remaining tests required to claim your child as a dependent.