Claiming Dependents on H1B Visa
Claiming dependents is one of the most effective ways for H1B holders to reduce their tax liability. However, for Indian citizens, this often leads to a complex web of Social Security Numbers (SSNs), Individual Taxpayer Identification Numbers (ITINs), and residency tests.
For the 2026 filing season (covering the 2025 tax year), the One Big Beautiful Bill (OBBB) has increased the value of certain credits, making it more important than ever to get your dependent status right.
1. The Residency Requirement: The 4-Country Rule
To be claimed as a dependent on your U.S. tax return, the individual must be a citizen, national, or resident of one of these four countries:
- United States
- India (Under specific Treaty provisions)
- Canada
- Mexico
The “Parent” Problem: Many H1B holders want to claim their parents in India. While the U.S.-India Tax Treaty is unique, parents living in India generally do not qualify as dependents unless they are U.S. residents or citizens. To be a “Qualifying Relative,” the dependent must typically live with you in the U.S. for the entire year or meet strict residency exceptions.
2. Qualifying Children (H-4 Visa Holders)
Most H1B holders claim their children who are in the U.S. on H-4 visas. To qualify:
- Relationship: Must be your child, stepchild, or eligible foster child.
- Age: Under age 19 at the end of 2025 (or under age 24 if a full-time student).
- Residency: They must have lived with you in the U.S. for more than half of 2025.
- Support: The child cannot have provided more than half of their own financial support.
3. SSN vs. ITIN: The Credit Gatekeeper
The type of tax ID your dependent holds determines which credits you receive:
- Social Security Number (SSN): Required to claim the Child Tax Credit ($2,200 per child in 2025). This usually only applies to children born in the U.S. or H-4 spouses with work authorization (EAD).
- ITIN: If your child was born in India and is on an H-4 visa without an SSN, you must apply for an ITIN (Form W-7).
- The Difference: With an ITIN, you cannot claim the $2,200 Child Tax Credit, but you can claim the Credit for Other Dependents ($500).SSN
SSN vs. ITIN
4. New for 2026: Expanded Child & Dependent Care Credit
Under the OBBB, if you pay for childcare (daycare or summer camp) for a child under 13 while you and your spouse work, the credit limits have increased.
- Maximum Expense: Up to $3,000 for one child or $6,000 for two or more.
- Requirement: Your spouse must also have an SSN or ITIN and, in most cases, must have earned income during the year.
How KKCA Secures Your Status
Filing for dependents involves sensitive documents like original passports or certified copies. At KKCA, we streamline this by:
- Certified Acceptance Agents (CAA): We can verify your family’s passports so you don’t have to mail original documents to the IRS.
- ITIN Strategy: We manage the Form W-7 process alongside your tax return to ensure your $500 dependent credits are approved.
- Treaty Analysis: We determine if Article 21 can be leveraged for specific dependent benefits for those in “apprentice” or “student” transition roles.
Call to Action
Looking for personalized tax services about your specific tax situation, please contact us. We are here to help you with your specific tax matters.
Frequently Asked Questions (FAQ)
Q: Can I claim my H-4 spouse as a dependent? A: No, a spouse is never a “dependent.” You either file Married Filing Jointly (which gives you a higher $31,500 standard deduction) or Married Filing Separately.
Q: My child was born in the U.S. in December 2025. Can I claim them for the whole year? A: Yes! The IRS considers a child born at any time during the year to have lived with you for the entire year. You can claim the full Child Tax Credit.
Q: Can I claim my siblings who are studying in the U.S.? A: Yes, if they live with you for more than half the year, are under 19 (or 24 if a student), and you provide more than half of their financial support.
Q: What if my ITIN application is rejected? A: Most rejections happen due to “insufficient documentation.” We ensure your W-7 application is bundled with the correct tax return and identity proofs to prevent delays.
Disclaimer
This blog is intended for informational purposes only and does not constitute legal or tax advice. Please consult a qualified U.S. CPA or tax attorney for guidance specific to your situation.