Dependents & Exemptions

Children have the legal right to make their own choices at age 18.

A qualifying child for the child tax credit must be a grandchild, son or daughter, adopted child or eligible foster child. That child must live with you and you claim her as a dependent and she is under age 17 at the end of the year and a citizen or resident of the US. If so, then you can claim her as a qualifying child for the child tax credit.

No. She is not a qualifying child for the child tax credit because she was not under age 19 as of the end of the year.

A noncustodial parent may claim his or her child(ren) on his or her tax return if the custodial spouse signs IRS Form 8332.
It is the Release of Claim to Exemption for Child of Divorced or Seperated Parents.
The signed Form 8332 must be attached to the noncustodials tax return each year. A noncustodial parent can ask the custodial parent to sign Form 8332 Part I which is a release of Claim to Exemption for future years.
If this part is signed then the noncustodial parent may photocopy this form each year and attach it to the tax return.

Uniform Transfer to Minors and Gift to Minors accounts are custodial accounts set up in a child’s name. There are no income eligibility limits to set up an account. Contributions are not tax deductible.
You may put up to $14,000 a year without any gift tax consequences.
As the custodian you have the choice to invest the money in any investment you choose. The current year tax consequences are that the first $1000 of the investment earnings is tax free; the next $1000 will be taxed at the child’s tax rate.
Any earnings above $2,000 will be taxed at the parent’s rate until the child is 18 years of age. After 18 the earnings are taxed at the child’s rate. An important item to note with these custodial accounts is that the account belongs to the child.
The child gains full control of the Uniform Gift account at age 18 and gains control of the Uniform Transfer account at age 21. Speak to your local CPA for more information on these custodial accounts.

You need to fill out Form SS-5-FS, which can be obtained either from your local CPA or from the Social Security Administration. The SSA website is http://www.socialsecurity.gov, . In addition to using the SSA website, you can call SSA toll-free at 1-800-772-1213.

Probably yes. Gross income for the dependent test does not include non-taxable social security, tax exempt interest or gifts.
For tax year 2013, if his gross income is less than $3,900, then he satisfies the gross income test criteria for claiming him as dependent.
Speak to your local CPA to verify if your father meets the other 4 dependency tests so you can claim him as a dependent.

If he is not a full-time student, then you may not claim him as a dependent. There are 5 dependency tests to qualify as a dependent. The gross income test for dependents applies to those 19 or older and not a full-time student under age 24. The gross income he is allowed to earn is $3,900 or less for tax year 2013.

If the other 4 of the 5 mandatory dependency tests are met, and if she is a full time student, then you may claim her as a dependent. There are 5 dependency tests needed to qualify as a dependent. The gross income test for dependents applies to dependents 19 or older and not a full time student under age 24. If she was not a full-time student, the gross income she is allowed to earn is $3,900 or less for tax year 2013.