It’s been said that life comes full circle. Well, so do taxes.
It’s difficult to watch your parents grow old. The ones who supported you while growing up are now the ones you’re taking care of. You may be curious if you can claim your parents as dependents on your tax return like they once did for you.
The answer lies in the following five tests set up by the IRS:
#1. They must be related to you.
#2. They must be a citizen or resident of the United States, Canada, or Mexico.
#3. They must not be filing a joint tax return.
#4. They must have an annual gross income of less than $4,000.
#5. You must provide more than 50% of their financial support for the year.
With these qualifications in mind, let’s take a look at some special circumstances that might apply to you and your parents.
Can I claim my parent as a dependent if…
…they receive Social Security Retirement Benefits?
Yes. Your parent is receiving benefits for the time and effort they put in while on the workforce. This amount is not included in their gross income amount for the year. That means that Rule #4 above is still met even if their benefits come to more than $4,000 annually.
EXCEPTION: If your parent decides to go back to work after retiring, then that income could affect Rule #4 and Rule #5 above. Here’s how. If their income amount from the new job comes out to be more than $4,000 for the year, then you can not claim them as a dependent on your taxes. In turn, if they are providing more than 50% of their own support with the new job, then you cannot claim them as a dependent either.
…they receive Social Security Disability?
Yes. Millions of Americans each year enter into the Social Security Disability program because they are no longer able to work due to a medical condition. Disability is available to those whose condition is expected to last longer than 12 consecutive months (or already has). One can receive this benefit until they are either no longer disabled or have reached full retirement age.
EXCEPTION: You can claim your parent as a dependent on your tax return without their benefit being affected. However, Social Security benefits can limit any wage income they receive while on disability (ie: from another job they are employed with).
…they receive Supplemental Security Income (SSI)?
Yes. This is a program available to those who have a disability which makes them unable to work but don’t qualify for regular disability benefits. This also works a bit differently than the disability program mentioned above. While you can claim your parent on your return if they receive SSI, your 50% support may exceed their income requirement to qualify them for the SSI program in the first place. Why is that? It is a means-tested disability program.
…they have a job?
Maybe. This situation is becoming more and more common. Whether your parent is bored at home, needs the extra cash, or simply enjoys the workforce, they may have a new job. It’s important for them to realize that the income they are earning is taxable and now included in their gross income amount. When claiming your recently-employed parent as a dependent, you’ll need to keep in mind Rule #4 and #5 above. If their new job is earning them more than the $4,000 annual threshold, then you can no longer claim them as a dependent. If this also means that you are no longer providing 50% of their support, then claiming them is not an option for you. That being said, if you still pass the tests with flying colors, then enjoy your tax deduction!
Taxes can be confusing. So can Social Security benefits.
Combining the two can lead to hundreds of questions and one major headache. When the ultimate goal is to help out a parent who’s always cared for you, it’s tough to focus on money. However, if you fit the qualifications, then you’re entitled to a tax deduction. So let’s get down to filing that tax return. With RapidTax, our customer support team is ready to help you prepare those taxes; deduction or not.
Hello,
My mom receives a widow’s pension. I have claimed her on my taxes in the past. I had a tax preparer in previous years. Mom does not work. Is the widow’s pension considered gross income? If not. Where do I find the $ figure to enter on the tax form? Thanks.
According to the IRS, tax-exempt income includes certain social security benefits such as your parent’s widows pension. You cannot claim this on your return as it is her only source of income. If you are claiming your parent, ensure you are claiming her for the entire year and you must provide more than 50% of their financial support. Your mother may file her own return, indicating that she is being claimed as a dependent if she chooses to claim her pension.
My mom gets $5,000 reported on a 1099R can I still claim her? I paid more than 51% of her support but she doesn’t live with me. She gets Social security but she is not required to file taxes, as she is below the filing threshold
Your mother’s gross income is too high (more than $4050) for her to qualify as your dependent. Even though you support her, the IRS requires applies a Gross income test as well as a support test. The IRS provides you with an Interactive Assistant to determine who you can claim as a dependent on your return.
Hi Michelle,
I own a 2 Family and my parents live in the bottom unit, we live in the top. They are both retired so no income other than ss and I pay for cable, telephone, internet and water. I do not charge rent and also buy groceries and other items they need. I am doing taxes online and was wondering if/how i could file my taxes and if i should claim my parents as dependents on my returns (filing jointly with my wife) or let them file separately on their own? And if i include them, how/where do i enter it on the returns?
thank you,
You can use the IRS’s Interactive Tax Assistant to determine if you can claim your parents as your dependents based on your tax situation.
can an unmarried couple just living together file as married filing joint just under the assumption they live together and have a daughter? this is in California
The IRS only allows a couple to file a joint tax return if the state they reside in recognizes the relationship as a legal marriage. Unfortunately CA does not recognize common law marriages.
My question is can my step brother claim me on his taxes as a dependent ? I was diagnosed with type 2 dietbeties and I’m receiving SSI he pays for my meals buy my cloths and pays my rent all I pay for if my out of pocket medication cost so can he claim me ?
Many families provide homes for relatives or provide financial support. You can claim your step brother who received SSI on your return once he meets the IRS tests to be your qualifying dependent.
-He must be a citizen or resident of the United States, or a resident of Canada or Mexico.
-He did not file a joint income tax return with anyone else.
-You must have provided more than half of his support.
-His gross income must be less than $4050 for the entire year. (Generally that amount does not include Social Security benefits.)
If you don’t live with him, you can’t be his dependent if you’re 24 or older at the end of the year. The only exception to claiming a dependency exemption for someone who doesn’t live with you is for taking the exemption for your parents.