• There are several good resources for determining if someone is a qualifying child or qualifying relative, including whether that person can be used to claim EIC:
  • AARP Foundation’s “Qualifying Child or Relative Resource Tool”, D19929, formerly the Tri-Fold.
  • Student status can be critical in determining if someone is a qualifying child.  A full-time student is a person who was enrolled for some part of at least five calendar months (which need not be consecutive) in a given calendar year, where the enrollment was for the number of hours or courses considered full-time attendance by the school. Note that this is different from the American Opportunity Credit criterion of “at least half time”.
    • irs.gov’s Qualifying Child Rules (“Age” section) has detailed definitions of “full time” and “school”.
  • Note: Starting with the 2018 tax year, the term “dependent” essentially means a person who qualifies the taxpayer for either the child tax credit ($2000) or the credit for other dependents ($500).

Entering Information in TaxSlayer 

  • The “Dependents/Qualifying Persons” section of TaxSlayer is where two types of people are entered:
    • Living in the taxpayer’s household, and either having a relationship (parent, daughter, etc.) or getting more than half of their support from the taxpayer – those who meet the support test (if a QC, that person doesn’t provide more than half their support; if a QR, the taxpayer provided more than half the support)
    • Not living in the taxpayer’s household, but having a relationship (parent, son, etc.) and being supported by the taxpayer. 
  • TaxSlayer automatically enters the taxpayer’s last name as the dependent’s last name. If that is incorrect, then change the last name.
  • Enter dependents and qualifying children [starting with the youngest one first].
    • Note: The Intake Booklet asks the taxpayer to list “everyone who lived with you last year”. A taxpayer who follows this instruction may list someone who is neither a qualifying child nor a dependent (such as a roommate who pays a portion of the rent of an apartment). In such cases, don’t enter that person in TaxSlayer. [Generally, the taxpayer won’t know that person’s SSN/ITIN, and won’t understand why we are asking for such information.]
  • Checking the box labeled “Check box if the dependent does not have an SSN/ITIN/ATIN”, and then checking “Yes” for “This dependent will be completing a Form W-7, Application for ITIN:” requires completing Form W-7 within TaxSlayer.
    • Such a return must be paper-filed - create a note (page 8) saying that. 
    • See instructions in the section Paper Returns that Include a Form W-7, page 130.
  • Note for CA returns: California gives an exemption credit for dependents who would otherwise qualify but do not have a Social Security number and are ineligible for an ITIN. (If eligible for an ITIN, the taxpayer should file a W-7 – see previous paragraph.)
    • To claim the CA dependent exemption credit in this situation, taxpayers need to complete FTB Form 3568, Dependent Identification Number Requirement Exception (available only by e-mail) and attach the documentation required by that form to their tax return. 
    • [Workaround] Checking the box that the dependent does not have an SSN/ITIN/ATIN, then checking “No” regarding filing a W-7 blocks the federal return from being e-filed. To avoid this problem, enter 111-00-1111 for the Social Security number of the dependent, and answer “No” to “Was this person a U.S. citizen, U.S. national, or U.S. resident alien?” 
    • Explain the situation in a TaxSlayer note (page 8).
    • The CA return must be paper filed; after printing it, line through the 111-00-1111 SSN and write “No ID”.
  • Relationship – choose from the drop-down list.
    • Note: An adopted or fostered individual is treated as if biologically related.
    • For a stepparent, use “Parent”.
      • Note: A parent of a taxpayer’s stepparent is considered unrelated.
    • For a great-grandchild, use “Grandchild”. 
    • For a great-niece (or grandniece), and for a great-nephew (or grandnephew), the entry in TaxSlayer depends on whether the person is a qualifying child.
      • If the person meets the criteria to be a qualifying child, use “Niece” or “Nephew”.
      • Otherwise, use “None.” The person is considered unrelated.
    • If an in-law, use “Other”. (An in-law is never a qualifying child but can be a qualifying relative for things like HoH status, education credits, and child and dependent care.)
    • CA legal note: In California, someone aged 21 or older is no longer a foster child. If that child is disabled, the foster parent needs to formally adopt the child to claim him or her as a qualifying child.
  • Number of months the dependent lived in the home – choose from the drop-down list.
    • For dependents who were born or died during the tax year, select “12.”
    • A dependent is still considered to be living with the taxpayer when the taxpayer or the dependent is temporarily absent from the home because of school, business, military service, medical care, or vacation.
    • [Workaround] If the individual is a qualifying relative who did NOT live in the taxpayer’s home for one month or more (such as a son or daughter over the age of 24, living elsewhere all year, fully supported by the taxpayer), then select “Other Reasons,” rather than entering zero.
      • If you enter zero months, TaxSlayer will only give the credit for other dependents if you tell it the parent has a Form 8332.
  • If the taxpayer is a noncustodial parent who has the right to claim a dependent credit for a qualifying child who lived with the custodial parent, choose “Divorce/Separation”. DO NOT enter “0” months. 
      • A divorce decree can be used in place of a Form 8332 only if it clearly states the name(s) of the dependent children and the years (including “ongoing”) for which the claim to exemption has been released. 
      • Click “Continue” twice to get to a checkbox to indicate this.
      • Tax-Aide no longer sends Form 8332 to the IRS. Inform the taxpayer that they must retain that form for their records and provide it to the IRS upon request.
  • In the “Please answer the following” section:
    • “Over age 18” means that the dependent was at least 19 years old as of December 31 of the tax year. 
  • A full-time student is a person who was enrolled for some part of at least five calendar months (which need not be consecutive) in a given calendar year, where the enrollment was for the number of hours or courses considered full-time attendance by the school. Note: this is different from the AOC definition of “at least half-time.”
      • If the dependent is age 24 or older as of December 31 of the tax year, checking the box for a full-time student makes no difference for tax purposes.
  • An eligible educational institution is an accredited postsecondary institution.
      • If there is any doubt as to accreditation, check the U.S. Department of Education database at ed.gov/accreditation.
      • Enrollment in high school does meet the criteria for being a full-time student. 
    • “Check if this qualifying child is NOT YOUR DEPENDENT” should be checked if the person does not pass all the tests to be a dependent; for example, if that person provided more than half of his or her support for the year. (For more information about those tests, see Pub 4012 tab C.) 
      • Checking this box means that the person won’t be listed in the “Dependents” section of Form 1040. It also prevents the taxpayer from getting the child tax credit or the credit for other dependents for that person.
      • Tip:  use this when you need to show the taxpayer the difference a dependent makes on the return.
      • Also use this box if the person is not a dependent on the return but it’s possible the person will be a dependent in the future.  This prevents having to re-enter and reverify the dependent on a future return.
    • If the dependent is 16 years or older at year end, ask the taxpayer if the dependent is married or not; do not assume unmarried status.
  • The final checkbox, regarding a Multiple Support Declaration, Form 2120 (latest revision is October 2018), is relevant only to qualifying relatives, not to qualifying children, and should be checked only if the taxpayer did not pay over half of the dependent’s support but still wants to claim the dependent as a qualifying relative.
      • To make such a claim, no other person can have provided more than 50% support for the dependent. 
  • Taxpayers who are divorced or legally separated as of the end of a tax year cannot claim their (former) spouse as a dependent, even if that (former) spouse resides with the taxpayer, and even if the taxpayer provides more than half the support for the (former) spouse.

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