Who is a Qualifying Child

Question

In my copy of the 1040 instructions, on page 17, is a flow chart headed "Do You Have a Qualifying Child?" My daughter, a US citizen, lives outside the US, with her non-resident alien husband, who is not filing any US tax return, and who provides more than half the household expenses. Their daughter is a US citizen as well. When going through the flow chart, on page 17 of our 1040 instructions, the daughter passes all the tests, including her not providing more than half her own support, as the father does that. According the flow chart, and Publication 501, she would seem to be a qualifying child, and, according to Step 2 on the chart, even a dependent. That is to say, according to my reading, the support test to allow a person to be a qualifying child, and, perhaps even a dependent child is that the child does not provide more than half his own support. The test for people who are relatives but not qualifying children is that the person filing the return must provide more than half the support (forgetting complicated cases such as divorced parents living apart, and the such). Is my understanding correct, and can my daughter claim her daughter as a qualifying child and also as a dependent?

Alan · Accepted Answer

Your understanding is correct for this situation. The daughter is the qualifying child of her parents. As one of the parents is an NRA without any US source income and is not filing a US tax return for any purpose, the mother has the qualifying child. (Also note that besides the >50% support test for a qualifying relative, there is a gross income test.)

You didn't ask what filing status the mother must use. She is married to an NRA and has not provided more than half of the cost of maintaining the household. As such, she can not file as Head of Household. She can not file as Single. Her only choices are either to file as Married-Separate or if she and her husband make an election to treat the husband as a US resident alien for tax purposes, they could file a married joint return once he obtained a US taxpayer ID # (ITIN). But note, that if they file a joint return, all of the husband's worldwide income must be included on the return. As such, that makes both of them eligible for either the foreign earned income exclusion (this assumes they both meet the physical presence or bona fide resident test for the country in which they reside) or they could opt to take a foreign tax credit if any of the same income is being taxed by the US and the foreign country (this assumes the country in question is not on the US blacklist).

Who is a Qualifying Child

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