Exemptions

• The Internal Revenue Service, or IRS, recognizes two types of exemptions: personal and dependent. You can claim one personal exemption for yourself and another for your spouse if you are married and file a joint return. You can claim one dependent exemption for each of your dependents. Two types of dependent exemptions are available; you can take an exemption for each of your qualifying children and you can take an exemption for each of your qualifying relatives. Your spouse is never considered your dependent.
  
  

Qualifying Relative

• A qualifying child must be your child, foster child, step-child, sibling, half-sibling, step-sibling or a descendant of any of them. Your parent can never be your qualifying child, but your parent may be your qualifying relative. A qualifying relative must live with you for the entire tax year as a member of your household and you must provide more than half of her support. Her gross income for the tax year must be less than $3,650, as of the 2010 tax year. However, your parent, unlike other qualifying relatives like your aunt or uncle, does not have to live with you as long as the support and gross income tests are met.
  
  

Insurance

• Providing insurance for your parents is not included in the IRS' tests for determining dependency. Unless your parents lived with you as members of your household, earned less than $3,650 and the value of your insurance payments constituted more than half of their support for the tax year, providing insurance alone would not be sufficient to allow you to claim your parents as dependents on your federal income tax return.
  
  

Married Dependents

• You cannot claim a parent as a dependent if she is married and files a joint return, unless there would be no tax liability for either spouse on separate returns and they only filed a joint return to claim a tax refund. You cannot claim your parent as a dependent if someone else claims her as a dependent. Your parent may still have to file a federal income tax return even if you claim her as a dependent. If your parent has to file a tax return and you claim her as a dependent, she may not claim a personal exemption for herself on her return.