The joint return test is one of the IRS tests that potential dependents must pass in order to be claimed as such by another taxpayer.
Important
According to the IRS: “You generally can’t claim a married person as a dependent if filing a joint return.”
The joint return test stipulates that no dependent can file a joint return with a spouse and still be claimed as a dependent on someone else’s return, such as that of a parent or guardian. There is, however, an exception to this rule.
Because claiming dependents is valuable, the IRS institutes several tests, such as the joint return test, to make sure that dependents aren’t being double-counted.
Key Takeaways
- When deciding if someone who has lived in your house that you have supported and who has not made any money is a dependent, you must apply the joint return test.
- In most cases, you can’t claim someone as a dependent who is filing a joint tax return with someone else (usually a spouse).
- One exception is if neither the person you claim as a dependent nor their spouse made enough income to be taxable, but they filed a return to get reimbursed for wages withheld.
Understanding the Joint Return Test
According to the joint return test, a taxpayer filing a joint return can be claimed as a dependent under only one condition: “that person and their spouse file the joint return only to claim a refund of income tax withheld or estimated tax paid.”
A taxpayer may not count someone who is married and files their return with their spouse as a dependent, even if that person makes no money during the tax year and lives in the taxpayer’s house if their spouse made taxable income reported on their joint return.
Consider this scenario: You have supported your 18-year-old child who lived with you all year while your child’s spouse was in the Armed Forces and earned $35,000 for the year. If the couple files a joint return, you cannot claim your child as a dependent.
Another scenario: Your 18-year-old son and his 17-year-old wife earned $800 from part-time jobs and no other income. They lived with you all year. Neither is required to file a tax return but do so to claim an American opportunity credit of $124 and get a refund of that amount. Because claiming the American opportunity credit is their reason for filing the return, they aren’t filing it only to get a refund of income tax withheld or estimated tax paid. Thus, you can’t claim either of them as a dependent.
Joint Return Test for Claiming Dependents
The modern income tax was first introduced in 1913, and a deduction for dependents was added to the tax code four years later.
That Congress has supported a deduction for dependents for so long is a reflection of its desire to support the option to have a large family while still maintaining the overall progressivity of the federal income tax regime. The original income tax was quite progressive, with only about the top 1% of incomes taxed. But with that progressivity came a bias against large families, which generally require more income to support.
Congress has continued to support deductions for dependents ever since and made claiming dependents even more lucrative for some taxpayers with its 2018 tax reform legislation.
Starting in 2018, taxpayers who can claim a dependent under the age of 17 will receive a tax credit of $2,000 per child, up from $1,000 previously. Further, Congress raised the income level at which the credit phases out. The credit now begins to phase out at $400,000 of income for married couples and $200,000 for singles, compared with 2017 levels of $110,000 for married couples and $75,000 for singles. This benefit is a particularly valuable part of the tax code for many filers because the child tax credit is a dollar-for-dollar reduction of tax liability, rather than a deduction, which lowers taxable income.
Related Terms: income tax, IRS, tax refund, tax deduction, American opportunity credit, child tax credit
References
- Internal Revenue Service. “Publication 501”, Page 11.
- Internal Revenue Service. “Publication 501”, Page 12.
- Internal Revenue Service. “Individual Income Tax Return for Calendar Year 1917”.
- The Library of Congress. “History of the US Income Tax”.
- National Archives. “Document for April 15th: Income Tax Form 1040, 1913”.
- U.S. Congress. “H.R.1 - An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018”.
- Internal Revenue Service. “Tax Year 2021/Filing Season 2022 Child Tax Credit Frequently Asked Questions — Topic A: 2021 Child Tax Credit Basics”.
- Internal Revenue Service. “Publication 972 Child Tax Credit”, Page 3.
- Internal Revenue Service. “Credits and Deductions for Individuals”.
- Internal Revenue Service. “Ten Facts About the Child Tax Credit”.
