What is the status of Sally as a qualifying child for Mike and Janet when Mike files his return?

To determine Sally's status as a qualifying child for Mike and Janet, we need to consider the IRS criteria for a qualifying child, which generally include relationship, age, residency, support, and joint return tests.

Sally qualifies as a qualifying child if she meets the following criteria:

1. Relationship: She must be the child of Mike, Janet, or their siblings (stepchildren also qualify) or a descendant (e.g., grandchild).

2. Age: She must be under the age of 19 at the end of the tax year, under 24 if she is a full-time student, or permanently and totally disabled regardless of age.

3. Residency: Sally must have lived with Mike and Janet for more than half of the year.

4. Support: Sally may not have provided more than half of her own support during the tax year.

If Sally satisfies all these requirements, then she is indeed classified as a qualifying child. This classification is vital because it allows Mike and Janet to claim certain tax benefits such as the Child Tax Credit or the Earned Income Tax Credit, which can significantly reduce their tax liability.

In contrast, a qualifying relative would not meet the necessary criteria to be considered a