PM 15-06-01-f

new textMAGI Frequently Asked Questions

  1. Q-Who is a tax filer?
    A-A person who expects to file a federal tax return for the current tax year, or expects to file a joint return with their spouse.
  2. Q- Who is a tax dependent?
    A- A person who expects to be claimed as a dependent by a tax filer. The dependent may or may not live with the tax filer. They may or may not be related to the tax filer.
  3. Q-Can a person claim their spouse as their dependent?
    A-
    No, if a married couple file taxes jointly, they are both considered tax filers. If they file jointly, they are in the same tax unit whether they live together or not. If they do not file jointly, one spouse cannot be the dependent of the other.

new textMAGI EDG Examples

In many cases, the EDG will be the same size whether we use Tax filer or Relationship rules, as the first two examples below show.

Example 1: Brad applies for himself, his wife, Angie, and their two children, 10 year old Phil and 5 year old Lisa. Brad and Angie plan to file a joint return claiming both their children as dependents.

Determine EDG for: Tax Filer or Relationship Rule? Who to include? EDG size
Brad Tax filer Brad, Angie, and their tax dependents, Phil and Lisa 4
Angie Tax filer Angie, Brad, and their tax dependents, Phil and Lisa 4
Phil Tax filer Phil, the tax payers, Brad and Angie, and their other tax dependent, Lisa 4
Lisa Tax filer Lisa, the tax payers, Brad and Angie, and their other tax dependent, Phil 4

Results: Brad and Angie are tax payers, so tax filer rules apply to them. Phil and Lisa are tax dependents for whom none of the exemptions listed in Step 2 apply, so tax filer rules apply to them as well. The result is that for all four individuals, the EDG includes the tax payers and their two dependents.

Example 2: The scenario is the same as in Example 1, except that neither Brad nor Angie expect to file taxes.

Determine EDG for: Tax Filer or Relationship Rule? Who to include? EDG size
Brad Relationship Brad, his spouse, Angie, and their children, Phil and Lisa 4
Angie Relationship Angie, her spouse, Brad, and their children, Phil and Lisa 4
Phil Relationship Phil, his parents Brad and Angie, and his sibling Lisa 4
Lisa Relationship Lisa, her parents, Brad and Angie, and her sibling, Phil 4

Results: Since no one in the case is a tax filer or dependent, relationship rules apply. Spouses, parents, children and siblings are considered for each individual.

In examples #1 and #2, the same four family members are in each individual's EDG whether tax filer or relationship rules are used.

Example 3: Beth, age 60, applies for herself and her grandson, Ben, age 10. She states that she will file taxes and claim her grandson as a dependent.

Determine EDG for: Tax Filer or Relationship Rule? Who to include? EDG size
Beth Tax filer Beth and her dependent, Ben 2
Ben Relationship Ben 1

Results: Since Beth is a tax filer, her EDG includes herself and her grandson who is her tax dependent. Ben is a tax dependent who is claimed by a person who is not his parent or spouse (Step 2, exception #1), therefore relationship rules apply for him and he has an EDG of one.

Example 4: Bob, age 30, applies for himself, his son John, age 7, his girlfriend Mary, age 30, and their daughter in common, Jane, 9 months. Bob is not a tax payer. Mary is a tax payer and plans to claim John and Jane as her dependents.

Determine EDG for: Tax Filer or Relationship Rule? Who to include? EDG size
Bob Relationship Bob and his children, John and Jane 3
Mary Tax filer Mary and her tax dependents, John and Jane 3
John Relationship John, his father, Bob, and sibling, Jane 3
Jane Relationship Jane, her parents, Bob and Mary, and sibling, John 4

Results: Since Bob is a non-filer, he uses relationship rules. His EDG includes himself and his 2 children. Mary is a tax payer, so her EDG includes herself and her 2 dependents. John is a tax dependent who is claimed by Mary. Since Mary is not his parent (exception #1), relationship rules apply for John. His EDG includes his father and sibling.

Jane is a tax dependent who is claimed by one parent, but lives with both parents who are not filing a joint return (exception #2). Relationship rules apply for Jane, so her EDG include herself, both parents and her sibling.

Example 5: Samantha, age 19, applies for herself and her younger brother Tim, age 8. She states that she is a tax filer and will claim Tim as a dependent. Samantha is pregnant and is expecting twins.

Determine EDG for: Tax Filer or Relationship Rule? Who to include? EDG size
Samantha Tax filer Samantha + 2 fetuses, and Tim 4
Tim, Samantha's tax dependent (exception #1) Relationship Tim 1

Results: Since Samantha is a tax filer, her EDG includes herself, her brother who is her tax dependent, and her 2 unborn fetuses. Tim is a tax dependent who is claimed by a person who is not his parent or spouse (exception #1), therefore relationship rules apply for him and he has an EDG of one.