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On October 4, 2004, President Bush signed into law the Working Families Tax Relief Act of 2004 (PL 108-311). The law, according to the Joint Committee on Taxation, will reduce taxes by some 146 billion U.S. dollars in the next 10 years.

There are many provisions of this Act to help working families. This article will focus on a single provision, the "uniform definition of a child."

The purpose of the provision was to simplify the tax code by adopting a uniform definition of a child's dependency exemption, the child credit, the earned income credit (EIC), the dependent care credit, and head of household filing status.

In general, under the previous legislation a dependency exemption is allowed if the taxpayer can demonstrate that it met five basic tests. Under the new definition, a dependency exemption is allowed for a person who satisfies the requirements and therefore qualify as "qualifying child" of the taxpayer or qualifying relative. "

There are some circumstances in which a person otherwise qualified (qualifying child or qualifying relative) would not be as dependent on the following situations. The individual is a dependent of another taxpayer, so that person can not take charge. The individual filing a joint return, and the individual is a citizen or resident of the United States or a country contiguous to the United States.

As a general rule, there are four tests that must be met to be considered a qualifying child

1. Value

2. A household member

3. Age

4. Self-help

The proof of the relationship is satisfied if the person is a child of the taxpayer or a descendant of a child or a brother, sister, stepbrother or stepsister of the taxpayer or a descendant of any of these people.

The term "child" includes son, daughter, stepson or stepdaughter of the taxpayer, or an "eligible foster" child of the taxpayer.

Under this provision a legally adopted child or a child placed with the taxpayer for adoption is treated like a child by blood and an "eligible foster" an individual child is placed with the taxpayer by an authorized agency or court.

The member of household test requires the person must have had the same principal place of residence as the taxpayer for more than half of the fiscal year.

Because the taxpayer does not have to provide more than half the aid of an individual meeting the requirements to be a qualifying child, more than one taxpayer may qualify to claim the person as a dependent.

If more than one taxpayer is entitled to claim and not the individual as a dependent on your tax return, there are provisions to determine that taxpayers be allowed the dependency exemption.
If one of the taxpayers claiming the dependency is the father of the person, then the parent will receive the dependency exemption.

If both parents are calling the person in separate statements, one with which the individual lived the longest during the year shall be entitled to exemption.

If the individual resided in an equal amount of time with each one, then the parent with the highest adjusted gross income qualify for the exemption.

If any of the contributors are the parents of the individual, then the one with the highest adjusted gross income is allowed dependence.
This is a partial view of the new qualification standards Child. I hope this article has helped clarify this rule.

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