Sometimes we’re so busy growing up that we forget they’re growing old.
Everyone knows that claiming a dependent on your income tax return can get you a significantly larger refund. For every dependent you claim on your taxes you can claim an extra personal exemption. That’s a large chunk of change you can deduct from your income, thus reducing your tax burden.
But who exactly can you claim? Are you eligible to claim your parents as dependents?
When it comes to taxes there are actually two different types of dependents: qualifying children and qualifying relatives.
Obviously, you can’t claim your parents as qualifying children. So the question becomes, do they meet the requirements for qualifying relatives?
Is your parent a qualifying relative for tax purposes?
In order to claim someone as a qualifying relative they must:
- Have lived with you all year as a member of your household, or be one of the following family members: child, parent, sibling, stepparent, stepchild, step-sibling, half sibling, grandparent, grandchild, child-in-law, parent-in-law, sibling-in-law, uncle, aunt, niece, or nephew
- Be a U.S. citizen or resident, or a resident of Canada or Mexico
- Be unmarried, or married but not filing a joint return
- Not be a qualifying child of you or someone else
- Have a gross income of less than $4,000
- Have more than half of their total support for the year provided by you
In plain English, this means that yes you can claim a parent as a dependent but they have to meet the above requirements.
Are Social Security Benefits included?
As a general rule, Social Security benefits are not included in gross income. For more information about Social Security and Disability benefits, check out our other article, “Claiming Parents as Dependents If They Receive Social Security Benefits“. Be sure to make sure they are tax-exempt, because this could determine your eligibility to claim them as a dependent.
When determining if you provided over 50% of a parent’s total support, be sure to consider
- lodging
- food expenses
- utilities
- repairs
- household expenses
- clothing
- education
- medical and dental expenses
- travel
- recreation expenses
If you support a parent who meets all of the requirements listed above be sure to claim them when you file online this season!
If I had contributed 4,000 to a traditional IRA in 2012. Would that be a adjustment on my taxes? Would it be consider taxable income?
Contributions to an IRA, reduce your taxable income. The IRS categorizes it as an “above-the-line” deduction, which means you can use the deduction regardless of whether you itemize your deductions or claim the standard deduction.
Quick background on my question.
I am looking to care for my two elderly parents. I am in the military, active duty, and have full benefits. So long as my parents meet the requirements for the IRS as dependents, they can become my dependents in the military (i.e. medical, dental, ID cards, commissary, etc.). Father’s income filing jointly is less than $25K, almost all from Social Security. Mother’s income is $0. I plan for them to move in with me in the next two years. They currently own their home, free and clear. I plan to quitclaim it, pay for all their household items, taxes, utilities, car bills, and other items.
I hope I am going about this right, but I am concerned since I am active military and get mostly free care that my IRS claim falls short until I have them move in with me. Any thoughts or guidance?
Thanks!
Hi Martin,
The IRS does not require that your parents live with you in order to claim them as dependents, so you are fine there. However, I think there are several potential stumbling blocks to you claiming them as dependents.
1) They are married. The IRS does not allow you to claim a married couple filing a joint return as dependents, so they will have to file separate returns for the rest of their lives if you want to claim them.
2) Your father at least has a gross income over $3,800. If your parents were to file separate returns, it sounds like your father would have an income of $25,000 and your mother would have an income of $0. If this is true, you would NOT be able to claim your father, but you might be able to claim your mother. The IRS only allows you to claim a parent if their gross income is less than $3,800.
3) Support. It’s not clear how much support you will be providing them. In this scenario you would have to prove that half of your mother’s support comes from you, as opposed to her husband or any other source. This would be tricky to do, and would require you to spend enough to at least offset whatever of your father’s $25,000 goes toward her support.
All things considered, you should look into this further, but I think it’s pretty unlikely you will be able to claim your father as long as his income remains so high. You have a better chance of being able to claim your mother, though this would require ongoing financial support on your part.
Hello again Tax advisor,
Thank you for the reply… I had nearly forgotten what I wrote. Here is an update. The income my parents have is from social security and a very small pension. They may qualify for the $4050 deduction rule based on this. Does this mean each parent or the combination of both, if I am to qualify them as my dependents? In other words, $4050 for one or $8100 for both?
I am now retired from the military and receiving my army pension, VA benefits, and continue to work, so I am able to assist them. They are selling their townhouse this year and I plan to pay their rent, utilities, and various other expenses as needed. Not sure where the house income stands with the IRS.
Thanks again for all you do.
In order for us to further advise you on this matter, because of the complexity of your situation, I would advise that you would make an account with us and fill out your tax information so we can get a better understanding of how you would like to file your tax return. You can visit Rapidtax.com to begin this process with us.
I’m trying to determine “support”…. what does recreation mean according to the IRS. My in-laws only make 10,200 annually between the two of them on SocSec (no filing). We are looking to pick up their mortgage payment ($550 mo) plus their utilities ($200 mo). Food (right now) is estimated at $2400 annually (they couldn’t afford anything more). They have no savings or other income. So, my question is if we pay their mortgage /utilities to allow them to relax a little bit in their retirement years, does the IRS consider the rest of their money is going to be spent on “recreation”? Or does recreation mean ….vacations and trips, or large purchases like boats, etc… The worksheet has you split the total income into three categories: support, other, and savings. Wouldn’t “other” fall under “recreation”? Please help!
Hi Darcy,
I think you’re getting too hung up on the definition of ‘recreation’ which doesn’t even seem that relevant to your situation. From what you describe, you would be providing your in-laws with a total of $9,000 of support over the course of the year. This is the total of the mortgage payments and utilities. If you paid for anything else (food, repairs, recreation, etc.) that would count toward the amount of support you are providing them. Now in order to claim them as dependents on your taxes, you have to provide more than half of their total support. That means, if they receive more than $9,000 from all other sources combined, you cannot claim them.
Also note that this is further complicated by the fact that they are married. You cannot claim them if they are married and filing a joint return. So if you want to claim them, they will have to file separate returns. Then your support would have to be divided between them and their income divided between them as well. Really when making this determination for dependency you have to do it on an individual basis. Also note that if any one of them as a gross income over $3,800 you cannot claim them.
my mom lives across the street from me, I pay for half her rent, cell phone and cable. She does not work, she was on disability but she is now 67, if I claim her as a dependent will this affect her retirement benefits and food stamps she receives?
Hi Claudia,
I’m not sure about the retirement benefits and food stamps – you’ll have to check with the appropriate agencies.
My mom lived with me all year and I want to know if I can claim her on my return. She is disabled and I want to know if her social security benefits are not part of a gross income. You said as a general rule they are nnot considered part of one. SHe makes $750/mo
Hi Rose,
That’s correct. Social security is generally not considered taxable income, though there are exceptions. You mother should receive a Form SSA-1099 that will tell you how much (if any) is taxable. If I had to guess, I would say that if Social Security was her only income for 2012, then it is probably not taxable and thus you would be able to claim her. It’s a little out of date but this page from the IRS should help provide some guidance: http://www.irs.gov/uac/Are-Your-Social-Security-Benefits-Taxable%3F
Jason and I paid all property expenses during the marriage I reported it in one of my disability claims. We did not claim her as a dependent but I did make a notation.