Advantages

• Being able to claim a dependent on your federal tax return will lower your taxes. For each dependent you claim, you get an exemption, which is subtracted from the amount of income that is subject to tax. The exemption for 2010 returns was $3,650 per claimed dependent.
  
  

Who Can Claim

• A dependent can only be claimed by one person. In order to claim a dependent, you cannot yourself be claimed as a dependent on someone else's return. The person you claim must be what the IRS calls a "qualifying child" or a "qualifying relative" and must meet the IRS tests for those categories.
  
  

Qualifying Child

• A qualifying child must be under 19 years old or under 24 years old if a full-time student, unless the child is totally and permanently disabled. The child must be younger than you are. The child cannot provide more than one-half of her own support. With some exceptions, the child must live with you for at least half the tax year. She must be your child, adopted child, stepchild, foster child, younger sibling or a descendant of any of those.
  
  

Qualifying Relative

• A qualifying relative, counter-intuitively, does not have to be related to you, as long as he lived with you as part of your household for the entire tax year. Qualifying relatives who are actual relatives may not need to have lived with you for the full year. The qualifying relative's income must be under a certain specified amount, and you must have provided at least half of his support during the tax year.
  
  

Additional Requirements

• Qualifying dependents must also meet the IRS definition of citizenship or residency and cannot file a joint return unless it is only to get a refund.
  
  

Online Help

• The rules for claiming exemptions can be complicated, with various exceptions to the general rules. To help guide you through the process of figuring out who you can claim as a dependent, the IRS has an interactive online "interview" feature that will walk you through a series of questions and tell you whether you are able to claim a particular individual. The questions are the same questions that a representative would ask if you called an IRS help line.