Should Children in a Family File Individual Income Tax Themselves or Be Recognized as Dependents for Tax Exemption? Master Two Steps to Avoid Errors.
When filing individual income tax for 2023 this May （2024）, please be aware that the Civil Code has lowered the age of majority to 18 years old.
The National Taxation Bureau of Kaohsiung, Ministry of Finance explained that, as prescribed in Paragraph 1 of Article 15 and Item 2 and Item 3 of Subparagraph 1 of Paragraph 1 of Article 17 of the Income Tax Act, where the taxpayer's children, as well as the taxpayer's and their spouse's siblings, are minors, or if they have reached the age of majority but are being supported by the taxpayer due to attending school, having physical or mental disabilities, or being unable to earn a livelihood, the taxpayer may report them as dependents for tax exemption. However, if they have reached the age of majority during the taxable year, they may choose to file their own individual income tax or have the taxpayer report their support and file a tax return together.
The Bureau further explained that taxpayers may wonder whether it is more advantageous for the children to file tax on their own or for the taxpayer to report them as dependents. The Bureau suggests that taxpayers can determine this based on two steps – “their age” and “whether they are attending school, have physical or mental disabilities, or are unable to earn a livelihood” – as summarized below:
|
Circum- stances |
Step 1: Age in 2023 | Step 2: Whether they are attending school, have physical or mental disabilities, or are unable to earn a livelihood | Results | |
| 1 | Minor age | Below 18 years old（was born in or after 2006） | No determination is required | Being reported as dependents by the taxpayer |
| 2 | Already reached the age of majority (Note) | 18 years old（was born in 2005） | No determination is required | May file their own individual income tax or be reported as dependents by the taxpayer |
| 3 | Above（including） 19 years old（was born in or before 2004） | In compliance | May file their own individual income tax or be reported as dependents by the taxpayer | |
| 4 | Above（including） 19 years old | Not in compliance | File their own individual income tax | |
Note: The Civil Code has lowered the age of majority to 18 years old starting from 2023.
The Bureau expressed that, regarding the determination of “being unable to earn a livelihood” for dependents, there is often a misunderstanding that those who are unemployed, on unpaid leave, or attending classes at a cram school or other learning centers are classified as “being unable to earn a livelihood”. We hereby clarify: According to the interpretation of Order Tai-Cai-Shui-Zi No. 10904516510 issued on March 26, 2010, individuals considered “unable to earn a livelihood” should meet any of the following conditions:
1. Those who, as certified by medical institutions, are incapable of earning a livelihood or engaging in work due to physical disability, mental disability, intellectual disability, or the necessity for medical care or long-term treatment due to major illnesses.
2. Those who are incapable of earning a livelihood or engaging in work due to the necessity of long-term care for physical or mental disabilities as prescribed in Item 3-7 of Subparagraph 2 of Paragraph 1 of Article 17 of the Income Tax Act.
3. Those under the guardianship declaration that has not been revoked.
As the 2023 individual income tax declaration season is around the corner, citizens who have doubts or questions concerning the applicability of relevant regulations are welcome to dial the free service hotline at 0800-000-321 for more information or go to the Bureau’s website （https://www.ntbk.gov.tw）to make an inquiry online through the national tax smart customer service “National Tax Assistant”.
Provided by: First Individual Income Tax Section
Contact person: Mr. Chang . Phone number:（07）7256600 ext. 7270
Contributor: Ms. Lee. Phone number: （07）7256600 ext. 7222
Reference URL：https://www.mof.gov.tw/Eng/singlehtml/f48d641f159a4866b1d31c0916fbcc71?cntId=622a3413a05f4f7d91a672e4dc611d08