IRS Publishes Official Version of Final Regs Defining Qualifying Relative

IRS Publishes Official Version of Final Regs Defining Qualifying Relative

Internal Revenue Service

The IRS has published the official version of final regulations (T.D. 9913) that clarify the definition of a qualifying relative for purposes of various provisions of the tax code for tax years 2018 through 2025. Effective October 13, 2020, the final regs adopt, with no substantive change, proposed regs (<a href="/lr/resolve//2clp3">REG-118997-19</a>) issued in June 2020. T.D. 9913, which was posted on the Federal Register website on October 9, 2020, is the official version of the final regs. The Tax Cuts and Jobs Act added section 151(d)(5) to provide that for a tax year beginning after December 31, 2017, and before January 1, 2026, the personal exemption amount is zero, thereby suspending the deductions for personal exemptions and the dependency exemption. However, section 151(d)(5)(B) provides that the reduction of the exemption amount to zero is not taken into account in determining whether a deduction under section 151 is allowed or allowable to a taxpayer, or whether a taxpayer is entitled to a deduction under section 151 for purposes of any other tax code provision. The TCJA also amended section 24 to create a $500 credit for dependents of a taxpayer other than a qualifying child described in section 24(c) for whom the child tax credit is allowed. The final regs provide that in determining whether an individual is a qualifying relative for purposes of various tax code provisions that refer to section 152 in years in which the exemption amount is zero, the section 151(d) exemption amount will be the inflation-adjusted section 152(d)(1)(B) exemption amount in the annual revenue procedure setting forth inflation-adjusted items that is published in the Internal Revenue Bulletin. Thus, the exemption amount is $4,150 for 2018. The final regs describe specified payments to a payee spouse for purposes of the section 152(d)(1)(C) support test without references to sections 71 and 682, which were repealed by the TCJA. The regs also clarify that a cross reference in section 24(h)(4) to “a qualifying child described in subsection (c)” refers to section 24(c) rather than to section 152(c).

T.D. 9913, which was posted to the Federal Register website on October 9, 2020, is the official version of the final regs. The IRS released a <a href="/lr/resolve//2cyt3">prior version</a> on September 16, 2020.

The IRS has published the official version of final regulations (T.D. 9913) that clarify the definition of a qualifying relative for purposes of various provisions of the tax code for tax years 2018 through 2025.

The IRS has published the official version of final regulations (T.D. 9913) that clarify the definition of a qualifying relative for purposes of various provisions of the tax code for tax years 2018 through 2025. Effective October 13, 2020, the final regs adopt, with no substantive change, proposed regs (REG-118997-19) issued in June 2020. T.D. 9913, which was posted on the Federal Register website on October 9, 2020, is the official version of the final regs. The Tax Cuts and Jobs Act added section 151(d)(5) to provide that for a tax year beginning after December 31, 2017, and before January 1, 2026, the personal exemption amount is zero, thereby suspending the deductions for personal exemptions and the dependency exemption. However, section 151(d)(5)(B) provides that the reduction of the exemption amount to zero is not taken into account in determining whether a deduction under section 151 is allowed or allowable to a taxpayer, or whether a taxpayer is entitled to a deduction under section 151 for purposes of any other tax code provision. The TCJA also amended section 24 to create a $500 credit for dependents of a taxpayer other than a qualifying child described in section 24(c) for whom the child tax credit is allowed. The final regs provide that in determining whether an individual is a qualifying relative for purposes of various tax code provisions that refer to section 152 in years in which the exemption amount is zero, the section 151(d) exemption amount will be the inflation-adjusted section 152(d)(1)(B) exemption amount in the annual revenue procedure setting forth inflation-adjusted items that is published in the Internal Revenue Bulletin. Thus, the exemption amount is $4,150 for 2018. The final regs describe specified payments to a payee spouse for purposes of the section 152(d)(1)(C) support test without references to sections 71 and 682, which were repealed by the TCJA. The regs also clarify that a cross reference in section 24(h)(4) to “a qualifying child described in subsection (c)” refers to section 24(c) rather than to section 152(c).

Sec. 24 Child tax credit

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IRS Publishes Official Version of Final Regs Defining Qualifying Relative