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.
My mom is a widow and lives with me. I pay all of the household expenses and buy most of the food. My mom receives money monthly from social security and from some investments. She has been told by her accountant that she no longer needs to file taxes.
Can I list her as a dependent?
If your mother isn’t making over the personal exemption amount for the specific tax year, you will be able to claim her on your tax return. This exemption amount can be found in line 42 on Form 1040.
Hi I live with my mom And i make more than her she has pension $8000 a year and ssi which I’m sure don’t count as gross income. The lease is under her name but she gets food stamps like $190 and housing assistance for rent for like $100 a month can I still list her as a dependent ? Will her assistance get cut off ?
You can use the IRS provided tool for further assistance on this matter. If you provided more than half of the financial support for your mother to keep her home, she will qualify as your dependent. You must also ensure that her income does not exceed the personal exemption amount of the specific tax year as well.
Mom gets state assistant medical and food stamp, In addition she gets sis. Can I claim her as dependent?
The IRS provides a questionnaire for you to go through so that you can determine whether an individual is qualified to be claimed as your dependent.
As long as your parent meets all of the qualification outlined in the five tests, you will be able to claim them as your dependent.
Hello, my parent live with me. My mom is working but my dad is disable and receive SSDI (disability benefit) only around 7000 after the insurance. My dad is file as married jointly with my mom, but can I claim my dad as a dependent? I read the rules that he meet the requirement except that file jointly status with my mom. Or does it mean that file as married jointly status mean automatically disqualified for claiming as dependent which mean my mom have to file as single status in order for my dad to be claim as dependent?
I don’t know how it would benefit us as which status to file and claim dependent.
Thanks for the help, it seem easier to file but understand it is hard.
According to the IRS Publication 501 Page 12 of the PDF, you will not be able to claim a married person as a dependent who files a joint return if they have a tax liability. It is only when they are receiving a refund that excludes them as a dependent exemption on the joint return that you will qualify to report them on your return as a dependent.
When you claim an individual as a dependent on your return, this allows you to claim further credits that will help reduce your taxes. In your situation, this may be dependent care credits.
I recieve a total of SSDI $8760 annually and half of my ex-husbands retired pension (was a police officer) total of 30,000 annually. I may have to live with my son and daughter in law due to poor health conditions, my first question is can they claim be as an a dependent? I don’t want to loose any of my benefits because of this. My other question is my daughter in law also receives SSDI,with my 2 small grandchildren… can two people live in the same household without losing benefits?
Thank you!
Hello Gail,
Your family member can claim you as long as they are a qualifying relative and you meet all the rules for an exemption.