Business & Finance Taxes

What If Someone Already Used a Dependent for Income Taxes?

By Business & Finance Last updated Monday, June/10/2024

Definition of "Dependent"

A dependent is either a related child under 19 (or 24 still attending school) living in the taxpayer's home for at least six months, or any person who lived in your home for the entire taxable year (provided that the relationship between you and that person complied with local law). The dependent cannot have earned more than $3,650 in the given year and the taxpayer must have provided at least half of the dependent's support for the tax year. Most importantly in this case, no other person can have claimed him as a dependent.

Amending a tax return is a simple process. Once you discover a mistake, such as wrongfully claiming a dependent, you need to file a 1040X, which allows you to make the changes and submit the form to the IRS. This must be done by mailing in the form. Once you discover the mistake, you must file the amended return promptly (preferably before that year's filing date) to avoid tax penalties and interest.

If you do believe that you deserve the credit for the dependent in question, the best steps you can take is to prepare your return and submit with it as much documentary support as possible proving that the person is your dependent. You will have to mail in your return, as e-filing does not allow you the option to submit the extra evidence you would need. At that point, the IRS will make a decision as to who gets the credit.

If the IRS decides that you do not get to claim the dependent, you can appeal. This can be a lengthy process, requiring you to draft a written protest and send it to the appropriate IRS office. The protest must contain your and the dependent's personal information and the basis for why you think you should be able to claim the dependent. These appeals are originally contested within the IRS, but could ultimately head to court. In such a case, it is a good to obtain legal representation.

To ensure that you are in compliance, it is always a good idea to consult a certified public accountant (CPA) or licensed attorney. If you make less than a certain amount in a given year, you may be able to obtain a free consultation from a Low-Income Taxpayer Clinic (LITC). This is a charitable organization, supported by the IRS, that provides support to individuals in resolving their tax issues.