December 2, 2023

Parents can traditionally claim their children as dependents on their tax returns. You can’t claim your pets, although people have been lamenting it for years. Until now, a person had to be born to qualify as a dependent, but in Georgia, taxpayers can now claim fetuses as dependentsaccording to a Georgia Department of Revenue Press Release. The IRS said that in light of the US Supreme Court’s decision on June 24, 2022 Dobbs v. Jackson Women’s Health Organization and the 11th District Court of Appeal of July 20, 2022 which ruled in Sistersong v. Kemp, the state will recognize any unborn child with a detectable human heartbeat, as defined in OCGA § 1-2-1, as eligible for the Georgia personal income tax contingent exemption. The 11th Circuit decision affected House Bill 481, the Living Infants and Equality (LIFE) Act amendment to OCGA § 48-7-26(a), which added an unborn child with a detectable heartbeat to the definition of “dependent” since July. 20, 2022.

It means that a taxpayer with an unborn child with a detectable human heartbeat (which can occur as early as six weeks gestation), can claim a dependent personal exemption of $3,000.00 for each unborn child. For tax year 2022, the deduction for dependent unborn children will be a deduction on line 12, “Other adjustments,” of Form 500 Schedule 1. It’s unclear exactly what proof is needed or what happens if no child is later born. However, Georgia says taxpayers must be prepared to provide “relevant medical records or other supporting documents … if requested by [revenue] Department”.

For tax purposes, a dependent is someone other than the taxpayer or spouse who qualifies to be claimed by someone else on a tax return. Broadly speaking, a dependent is someone who relies on another person for financial support, such as housing, food, clothing, necessities, and more. Usually, this includes your children or other relatives. Tax law has changed over the years, and there are breakdowns IRS rules on who can be claimed as a dependent. There’s been a surprising amount of controversy over the years in all kinds of specific cases about who can and can’t qualify based on support, relationship, and other factors.

For example, take children who are not US citizens. In Carlebach v Commissioner and Stern v. Commissioner, the Tax Court held that regardless of having good records and legitimate expenses, parents cannot claim dependency exemptions or child care credits for non-US citizen children. Additionally, this applies even if the children become US citizens in later years. In both Tax Court cases, the couples had many children (six children in one case, nine in the other) and lived in Israel. Only one of the spouses was a US citizen. The Tax Court upheld penalties related to accuracy and late filing in one of the cases.

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