Do you have a recent college graduate in the family, or will your child be graduating this year? If so, this might the last chance you have to claim a dependency exemption on your federal income tax return. Since the exemption is $4,050 for 2016 and 2017, that’s a tax break you don’t want to miss. Here’s what you need to know.

Generally, you can claim a dependency exemption for your child based on a support test for the year and whether your child has taxable income of less than the personal exemption. For 2017, the personal exemption amount is $4,050, the same as in 2016.

The taxable income requirement doesn’t apply when your child is under age 19 or is a full-time student under age 24. To meet the full-time student rule, your child must attend school at least five months during the year. That means you may be entitled to the exemption if your twenty-something child graduates in May after the spring semester, though you’ll still have to pass the support test.

What counts as support? Examples include food, clothing, and medical care. Typically, money your child receives but doesn’t use as support — for example, wages that are banked and not spent — does not count as support for this purpose.

Be aware that dependency exemptions, along with other personal exemptions, are phased out, or reduced, when your modified adjusted gross income exceeds certain levels. On your 2016 federal income tax return, the phase-out begins at $259,400 when you’re single and $311,300 if you’re married filing jointly. For 2017, the phase-out increases slightly to $261,500 for singles, and $313,800 when you file jointly.

Please give us a call for more information on dependency exemptions and how you can maximize your tax savings.