The Wagner Law Group
Wagner Law Group is a nationally recognized practice in the areas of
ERISA and employee benefits, estate planning, employment,
labor and human resources, investment management and real
in 1996, The Wagner Law Group has 28 attorneys engaged
exclusively in employee benefits, estate planning and
employment law. Six of our attorneys are AV rated by
Martindale-Hubbell as having very high to preeminent legal abilities
and ethical standards. The firm is among the largest ERISA boutiques in
the country. Our practice is national in scope, with clients in more
than 40 states and several foreign countries.
Wagner Law Group
Connecticut Ave., N.W.
Fax: (561) 293-3591
7108 Fairway Drive
Palm Beach Gardens, FL 33418
East Kennedy Boulevard
Tampa, FL 33602
Francisco, CA 94104
100 South 4th Street, Suite 550
St. Louis, MO 63102
February 10, 2017
Health and Welfare Law
IRS Issues Proposed
Regulations Redefining Dependent for Federal Tax Purposes
Internal Revenue Service has issued proposed regulations that
redefine the term "dependent" under the Internal Revenue
Code. In particular, the proposed regulations implement the
changes made to the Code (including the definition of dependent) by
the Working Families Tax Relief Act of 2004 ("WFTRA") and
Background. The Code generally allows an individual
taxpayer claim an exemption for dependents who have satisfied the
requirements of Code Section 152.
amended Code Section 152 so that a taxpayer may only claim a
"qualifying child" or a "qualifying relative" as
a dependent for federal tax purposes.
Section 152(c) defines a qualifying child as an individual who:
- Has a
certain relationship to the taxpayer (i.e., the
qualifying child relationship test).
- Has the same
principle place of residence as the taxpayer for over half of
the tax year (i.e., the residency test).
- Is younger
than the taxpayer and under age 19 (i.e., the age test).
- Does not
provide more than half of their own support (i.e., the
- Does not
file a joint return with a spouse except to claim a refund of
estimated or withheld taxes.
Code Section 152(d) defines a qualifying relative
as an individual who:
- Has a
specified relationship with the taxpayer.
- Has gross
income of less than the federal exemption amount for the tax
over half of their support from the taxpayer.
- Is not
another taxpayer's qualifying child.
In the context of employee benefit plans, the
federal definition of dependent determines whether an individual (e.g.,
domestic partners, children over age 27) can receive
employer-provided health insurance on a tax-free basis, and whether
certain expenses related to child care are eligible for reimbursement
from a dependent care flexible spending account.
IRS Regulations. Highlights from the proposed regulations
- Changes to
the method for determining a taxpayer's adjusted gross income
under the "tiebreaker" rules when a child can be
claimed by more than one taxpayer and the source of support of
certain payments that originated as governmental payments.
- Guidance on
the application the Code's relationship, residency, age,
support, and joint return tests for determining whether an
individual is a taxpayer's qualifying child.
regarding dependent status determinations for students, children
placed for adoption and foster children.
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