Claiming your parents on your tax return

by Rose Broyles

Every year, that dreaded time comes to file and pay taxes to Uncle Sam or collect a refund. One of the more complicated, yet much welcomed benefit of filing taxes is the ability to claim Mom and/or Dad on your tax return. But wait a minute, it’s not that easy. But once you figure out if they qualify it can make the difference whether you’re going to owe taxes or be able to have a little bit of spending cash to help out your parents some more and/or have a little extra for a nice dinner!

The only things certain in life are death and taxes
~Benjamin Franklin

Can you claim your elderly parents?

Requirement 1: Income –  The dependent parent can’t make more than the exemption amount of $3500, currently.  $3500.00 does not include Social Security which isn’t included in that equation. But, it does include things like pension, 401K, and other types of investments.

Requirement 2: Claiming both or one — You can’t claim your parents if they file a joint return. You can, however, claim one parent who qualifies for the income requirement. The other parent would have to file separately.

Requirement 3: Paying for more than half of their expenses – In addition to the above requirements, you have to prove that you are paying for more than half of their living and medical expenses. It can get tricky though,

“Say mom doesn’t have $3,500 taxable income, but gets $15,000 in Social Security and uses it to pay for some medicine and buy clothes. In that case, your contribution to her support may not come up to half”, says John Roth a federal tax analyst with CCH Inc.

There is a little bit of flexibility in that Mom and Dad don’t have to live with you. If they live in a nursing home, assisted-living or even in their own home , the costs that you contribute to their care can count towards the IRS requirement.

Some Leeway

Even if your parent(s) may not qualify for the income exemption, if they qualify for the other factors such as medical costs, you can claim them as your dependent. Be sure to include costs as medicare supplementary insurance and long term insurance.

Sharing with Siblings

The downfall of claiming your parents on your taxes, is that if you share caregiving with other siblings, only one of you can claim the dependent status. Once the siblings decide who is going to be the one claiming that there is an option called the Multiple Support Declaration that you can file that allow the others to file a waiver  to the tax exemption claim.  The good thing about this is that one sibling can rotate every year as the “provider”.

For more information, read Tax help in caring for an aging parent

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