Joint Return Test

The Joint Return Test is one of the IRS tests that potential dependents must pass in order to be claimed as such by another taxpayer. The joint return test stipulates that no dependent can file a joint return with a spouse and still be claimed as a dependent on someone else's return, such as that of a parent or guardian. There are, however, exceptions to this rule.

According to the Joint Return Test, a taxpayer filing a joint return can be claimed as a dependent under two separate exceptions. One is when neither the dependent nor their spouse is required to file a tax return, except to claim a refund. The other is when neither the dependent nor their spouse would owe any tax if they were to file separately instead of jointly. In these cases, another taxpayer may claim this person as a dependent.

The modern income tax was first introduced in 1913, and a deduction for dependents was added to the tax code four years later. That Congress has supported a deduction for dependents for so long is a reflection of its desire to support the option to have a large family, while still maintaining the overall progressivity of the federal income tax regime. The original income tax was quite progressive, with only about the top 1% of incomes taxed. But with that progressivity came a bias against large families, which generally require more income to support.

Congress has continued to support deductions for dependents ever since, and made claiming dependents even more lucrative for some taxpayers with its 2018 tax reform legislation. Starting in 2018, taxpayers who can claim a dependent under the age of 17 will receive a tax credit of $2,000 per child, up from $1,000 previously. Further, Congress raised the income level at which the credit phases out. The credit now begins to phase out at $400,000 of income for married couples and $200,000 for singles, compared with 2017 levels of $110,000 for married couples and $75,000 for singles. This benefit is a particularly valuable part of the tax code for many filers because the child tax credit is a dollar-for-dollar reduction of tax liability, rather than a deduction, which lowers taxable income. 

Because claiming dependents is valuable, the IRS institutes several tests, such as the Joint Return Test, to make sure that dependents aren’t being double-counted.