Why to add dependents?
You can claim exemption of $3300 for each dependent. And also you may claim few credits, like child tax credit, Education Credit etc. and deduction for certain expenses of dependents like , student loan interest, etc.

Whom can I claim as Dependent?
To claim a person as dependent, the person must satisfy all of six tests below :

    1. Relationship Test
      2. A person must either: - Live with you for the entire year as a member of your Household or - Your child or grand child or legally adopted child or stepchild or brother/half brother/step brother or sister/half sister/step sister or parent or grand parent or other direct ancestor but not foster parent or stepfather, step mother or a brother or sister of your father/mother or son/daughter of your brother/sister or father-in-law or mother-in-law or son-in-law or daughter-in-law or brother-in-law or sister-in-law.

    2. Citizen or Residency Test:
      3. To Claim an exemption, dependent must either be a U.S. Citizen or Resident, or Resident of Canada or Mexico, for some part of the calendar year in which the tax year begins

    3. Joint Return Test:
      4. Even if all the other dependency tests are met, exemption for your dependent is not allowed if he or she files joint return

    4. Gross Income Test:
      5. If the dependent has Gross Income $3300 or more for the tax year you can’t claim the exemption except the dependent is your child who is
      - Under Age 19 at the end of the year or
      - A Student under Age 24 at the end of the Year

    5. Support Test
      6. To claim the exemption for the dependent you must provide more than half of the person's total support during the calendar year.

    6. Dependent taxpayer test
      7. If you claimed as a dependent by other person, you can not claim anyone else as a dependent. Even if you have qualified child or qualified relative, you can not claim that person as a dependent.