Working Families Tax Relief Act



The Working Families Tax Relief Act of 2004 (WFTRA) changed the definition of dependent under IRC § 152, effective in 2005.  The consequences of this change are that an employee’s taxable earnings may be affected if he or she has health plan coverage for a natural or adopted child who does not meet the IRS definition of a qualifying tax dependent.

IRS Definition

As defined in IRC §152, a “qualifying child” must be the natural or adopted child of the taxpayer (or bear other specified relationship to the taxpayer) and also meet the following requirements:

The Fostering Connections to Success and Increasing Adoptions Acts of 2008 makes three changes to IRC § 152(c) definition of a “qualifying child” effective for taxable years beginning after 2008.

A child who does not qualify as a “qualifying child” may be considered a tax dependent under the definition of a “qualifying relative”.

The qualifying child and qualifying relative rules can be found in IRS publications. Check with the IRS (, 1-800-829-4933, TDD 1-800-829-4059).