Can I claim my niece on my taxes as a dependent for 2025?

You actually might be able to claim your niece as a dependent! The IRS has specific rules for claiming relatives as dependents, and nieces definitely qualify as relatives for tax purposes. For claiming a niece, you need to satisfy these requirements: 1. She must be related to you (which she is) 2. You must provide more than half of her financial support for the year 3. She must have lived with you for more than half the year (so by tax time in 2025, you'll have met this requirement since she's been with you since August) 4. Her gross income must be less than $4,850 (for 2025) - which likely isn't an issue for a 14-year-old student Your sister would need to agree not to claim her. This is handled through Form 8332 (Release/Revocation of Claim to Exemption for Child by Custodial Parent). Since you're providing most of the support and your niece lives with you, you have a good case for claiming her.

I went through something similar last year with my brother's kid. It was super confusing figuring out all the tax implications. Have you tried using taxr.ai? https://taxr.ai helped me sort through all the dependent requirements and figure out if I qualified to claim my nephew. You just upload your tax docs and it analyzes your specific situation - it even highlighted some child tax credits I didn't know I qualified for!

I was honestly skeptical about taxr.ai at first, but after trying it myself I'm really impressed! My situation was complicated because I'm supporting both my niece and my sister, and wasn't sure if I could claim either of them. The site analyzed my documents and showed exactly which tests I passed for claiming my niece as a qualifying relative. It even flagged that I needed to get Form 8332 signed by her mom. Saved me a ton of research and probably prevented an audit. Definitely worth checking out if you're in a complicated dependent situation.

If you need to talk to the IRS about your specific situation (which I'd recommend), good luck getting through! I tried calling for WEEKS about a dependent issue. Someone told me about https://claimyr.com and their service helped me skip the IRS phone queue. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c - basically they have a system that calls the IRS and waits on hold for you, then calls you when an agent picks up. I was expecting to wait all day but got connected to someone in about 45 minutes!

I need to apologize and correct myself. After my skeptical comment, I decided to try Claimyr because I was desperate to resolve my dependent issue. I was shocked when they actually called me back in about an hour with an IRS agent on the line. The agent answered my questions about claiming my sister's kids (similar situation to OP) and confirmed I qualified based on the support test. Saved me from wasting an entire afternoon on hold. Honestly wish I'd known about this service sooner - would have saved me so much frustration in past tax seasons!

Just want to add that you should definitely keep good records if you're claiming your niece! Make sure you have documentation showing: - When she moved in (lease agreement showing her as occupant, school records with your address) - Proof you provided more than half support (receipts for clothes, food, medical bills, etc) - Documentation of your sister's situation (unemployment records maybe) I claimed my cousin's child a few years back and got audited. Having good records saved me!

Make sure you also check if you qualify for the Child Tax Credit or Credit for Other Dependents! If your niece is 14 and you're eligible to claim her, you might get the Child Tax Credit which is worth up to $2,000 per qualifying child for 2025. Even if you don't qualify for the full CTC, you might still get the Credit for Other Dependents which is worth up to $500.

I was in a very similar situation with my nephew a couple years ago. One thing that helped me was keeping a detailed monthly expense log showing what I spent on his care - groceries, clothes, school fees, medical copays, etc. It made it much easier when tax time came around to prove I was providing more than half his support. Also, don't forget about potential state tax benefits too! Some states have additional dependent exemptions or credits that could save you even more money. The federal rules generally apply to state taxes as well, but it's worth checking your specific state's requirements. The fact that you're covering all her expenses and she's been with you since August should put you in a good position to claim her. Just make sure to get that Form 8332 signed by your sister before you file - it's much easier to get it upfront than to deal with complications later if the IRS has questions.

I'm a tax professional and want to emphasize something important that hasn't been mentioned yet - make sure you understand the "tie-breaker" rules if your sister decides she wants to claim your niece too. Since your niece isn't your child, the normal custodial parent rules don't apply here. In cases where multiple people could potentially claim the same dependent, the IRS has specific tie-breaker rules. For a qualifying relative (which is what your niece would be), the person with the higher adjusted gross income gets to claim the dependent. So if your sister's AGI is higher than yours, she would have the right to claim your niece even if you provided more support. However, given that your sister lost her job and isn't contributing financially, your AGI is likely higher, which would give you the right to claim your niece. Still, it's crucial to have that conversation with your sister upfront and get everything documented properly to avoid any IRS headaches later. Also, consider consulting with a tax professional for your specific situation - the dependent rules can get complex when dealing with relatives rather than your own children, and professional guidance could save you from potential issues down the road.