Tax Reform: What is the new “Other Dependent” Credit?

Under the 2018 Tax Cuts and Jobs Act guidelines, a taxpayer may be able to claim a $500 credit for household dependents that don’t meet the definition of a qualifying child or qualifying relative.  Provided that the individual has income of less than $4,150 and meets the criteria listed below, you may be entitled to receive the non-refundable credit.

You may be able to take the new Other Dependent Credit if:

  1. You are providing support for a dependent such as a family member, domestic partner, or friend.  You can also claim this credit for your children who are 17 years of age or older, as they are not eligible for the Child Tax Credit once they turn 17.
  2. A non-relative is a member of your household for the entire year. Relatives don’t need to live with you to qualify for the “other dependent” credit.
  3. The relationship between you and the person you are seeking to receive a tax credit for does not violate the law. For example, you can’t be married to another person and receive the “other dependent” credit!
  4. You provide more than half of their support.
  5. The dependent must have a Social Security number—an ITIN or an ATIN is not acceptable.

Provided that a taxpayer’s adjusted gross income (AGI) doesn’t exceed $200,000 (or $400,000 if filing jointly), the full $500 credit will be granted. If income exceeds the limit, the credit will decrease by $50 for every $1,000 that the AGI exceeds the limit.