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MONEY SMART KIDS
Claiming Dependents
by Janet Bodnar

My husband, son and I moved out of my father's house in September 2003. My father says he should claim our son as a dependent, even though we paid half the bills, rent, plus all our son's expenses. Who should claim him?

You get to claim your son. The critical factor is the support test: To claim someone as a dependent, you must provide more than half of his or her support. If you paid all the expenses for your son, then he is your dependent, regardless of the fact that you lived in your father's house for a portion of the year.

I live with the father of my child but we're not married. I work, but the child's father said he was claiming her and I couldn't. Can I file as head of household and claim my daughter as a dependent?

Again, it depends on who pays for more than half the expenses for your daughter's support. And if you're a single person providing more than half the cost of keeping up the principal home for yourself and your child, you would qualify for head-of-household filing status.

My disabled son earns Supplemental Security Income (SSI) through social security. Can he contribute this money to a Roth IRA?

To contribute to a Roth IRA, you must have earnings from a job. SSI benefits don't qualify.

My son would like to give me $11,000 this year. As I understand it, there is no paperwork and no tax implications. Is this really as easy as it sounds?

It really is that simple. The law completely ignores gifts of up to $11,000 each year. If he were to give you more than $11,000, there would be no tax implications for you, but he would have to file Form 709, "United States Gift Tax Return." But no tax is actually due until he exhausts his $1-million lifetime gift tax exemption.

My daughter is a graduate student who receives a fellowship to cover living expenses but is not required to do any teaching or research. I understand she has to pay income taxes, but it doesn't seem she has to pay self-employment tax because she is not a contractor and is not providing any service. Am I correct?

Correct on both counts. Your daughter's fellowship is taxable because it covers room and board, but she doesn't owe self-employment tax.