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 parents have lived at my house this year. My father receives SS benefits because he lost 100% of his hearing in his 50s. My mother has predominately been a house wife , so she never made a substantial income. Can I claim them since i am providing housing?
My mom and Dad have always filed joint taxes in the past but since they stopped working and are on SSI they haven’t filed taxes in a couple of years however this year I wanted to see if I can add my mom as a dependent she meets all the criteria mentioned above but I wanted to make sure it wouldn’t cause any problems when my dad files his taxes it seems he may have made more that $4000 this year on part time jobs this past year, can he file alone if he decides to file taxes? Not sure what’s the best route I feel like I should have claimed my mom all those years they didn’t file taxes.
My mother is disabled and doesn’t work and my father works a little but doesn’t have over 4,000 of AGI. They both live with me and I support them fully. My father has typically filed a joint return with his wife in the past but it has always yielded a tax refund. If my father files a joint return this year, and has a tax refund, would I be able to claim them? If not, then should my father file a married filing separately return for me to be able to claim them both? Thank you.
I myself received SSDI and work a part-time job. I live with my mother who receive Social Security and is 77 year old. I help maintain the household, because she can’t live alone anymore. Can I claim her in my income taxes?
can i claim my mom on my tax she only get ss no other income