person who derives primary support from another party. In order for a person to qualify as a dependent for federal income tax exemption purposes, five tests must be met: support test, gross income test, joint return test, citizenship or residency test, and relationship or member of household test.
any person with respect to whom a taxpayer can claim a dependency exemption; defined by the Internal Revenue Code as any individual supported by the taxpayer who is related to the taxpayer in specified ways or who makes his principal abode in the taxpayer's household. Six tests must be met:
- support.
- relationship or household membership the entire year.
- gross income.
- joint return.
- citizenship or residency.
- legal relationship. The amount of the dependency exemption is indexed for inflation each year (for example, in 2006, the amount was $3,300).
a person who relies on another for economic support. For insurance purposes, the following may be included: (1) the insured's legal spouse; (2) any unmarried children younger than a specified age who are dependent upon the insured for support (age requirements vary from plan to plan); (3) unmarried children between specified years of age who are dependent upon the insured for support, and who are full-time students in an educational institution (age requirements vary).
A dependent child cannot be covered under more than one insured employee's plan. For example, if the husband and wife are both insured employees of different companies, coordination of benefits would determine which plan is primary and which plan is secondary. In some states, the father's plan is primary; in other states, the birthday rule would be used: the parent with the earlier birthday would have the primary plan.
