Claiming Parents as Dependents If They Receive Social Security Benefits

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.
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115 Replies to “Claiming Parents as Dependents If They Receive Social Security Benefits”

  1. My mother gets a social security check and food stamps.She lives in goverment assisted housing which is based on her s.s..If i claim her will this effect her in any way.

    1. There may be consequences to claiming your mother who is receiving government assistance as a dependent on your return. For her to qualify as your dependent, you must be able to show that you provided at least 50% financial support for your mother for the year. If her government assistance exceed your support, you may be penalized for claiming her as a dependent.

  2. My daughter and granddaughter live with me in my home I am on SSD and get 1200.00 a month will she be able to claim me as a dependent on her taxes with the home mortgage in my name

    1. In order to qualify as your daughter’s dependent she must have provided at least 50% of your financial support. Further if you have earned income more than the personal exemption for the tax year in question ($4050 for 2016), she will not be able to claim you as a dependent on her return.

  3. My parents just got PR card and coming in April to stay with us for 5 month then go back and come again next year…do they have to file tax evey year too..?

    Thank you.

  4. Hi Michelle,

    I moved in with my Mom the end of April 2016 after she lost her job and wasn’t able, financially, to care for herself. I’ve paid all of the household expenses since then. Mom has received $1200/Mo SS, and also received a $5000 (before taxes) 401K payout.
    Does the 401K payout negate the possibility of my claiming her as a dependent?

    Thank you.

    1. Hi Robin,

      The IRS has strict guidelines to follow when claiming a dependent. In order to claim a dependent relative, their annual gross income must be less than $4,000. While Social Security benefits do not count in that income amount, 401K and IRA distributions do.

    1. Hi Theresa,

      Survivor benefits do not contribute to the annual gross income amount limitation. Therefore, if you meet all of the other qualifications (listed above) set forth by the IRS, then your son can claim you as a dependent, regardless of your benefit amount.

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