Question: Asha and Malik have been married several years with three school-age children. Due to COVID-19 complications, Asha died in mid-June 2021. Malik does not wish to file married filing joint (MFJ) as the surviving spouse for Asha’s 2021 final tax return. If Asha’s 2021 final tax return uses the filing status of married filing separate (MFS), can the 2021 final return claim their children as qualifying dependents based on the period when Asha was alive?
Answer: No. Asha’s final Form 1040, U.S. Individual Income Tax Return, may not claim the children as qualifying dependents because they do not meet all of the dependency tests.
In general, the requirements of filing a return where the taxpayer has not been in existence for the entire taxable year are the same as filing a return for a taxable year of 12 months ending on the last day of the short period [Reg §1.443-1(a)(2)].
To claim children on the decedent’s MFS return, the children need to meet the requirements of the support and residency tests for more than half the calendar year, not the partial year Asha was alive during the tax year (§152). The full calendar year is the test period, not the partial year that the decedent was alive. Even if the decedent had income after death used to support the children for the balance of the calendar year, that income could not be used to meet the test because the estate and decedent are considered different taxpayers by IRS so it would be the estate furnishing support, not the decedent.
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Information included in this article is accurate as of the publish date. This post is not reflective of tax law changes or IRS guidance that may have occurred after the date of publishing. All taxpayer circumstances are different, and NATP recommends contacting research services if you have specific questions about your clients’ tax situations.