Under what circumstances can a taxpayer claim a dependency exemption?

A taxpayer can claim a dependency exemption for qualifying children or relatives who meet specific criteria established by the IRS. This includes both children and certain other relatives, depending on their relationship, age, residency, and financial support.

To qualify as a dependent, a child must meet several tests, including the relationship test (being a child, stepchild, or foster child), the age test (generally under 19 or under 24 if a full-time student), the residency test (living with the taxpayer for more than half the year), and the support test (the taxpayer must provide more than half of their financial support).

In addition to qualifying children, certain relatives such as parents, siblings, or grandparents may qualify as dependents if the taxpayer provides more than half of their support and meets other criteria. This broadens the circumstances under which a dependency exemption can be claimed, making it applicable to a wider range of family structures and financial situations.

The other options do not accurately reflect the criteria for claiming a dependency exemption; for instance, just living with the taxpayer or simply providing financial support without meeting the specific relationship and support requirements would not suffice. Similarly, the definition of a qualifying child includes age limits that go beyond just being under 21,