26 Park Street, Suite 2062 | Montclair, NJ 07042 | 973-226-5500 | email@northessexchamber.com

       

Can You Claim Your Elderly Parent As a Dependent on Your Tax Return?

 

Perhaps. It depends on several factors, such as your parent’s income and how much financial support you provided. If you qualify for the adult-dependent exemption on your 2017 income tax return, you can deduct up to $4,050 per qualifying adult dependent. However, for 2018, under the Tax Cuts and Jobs Act, the dependency exemption is eliminated.

 

Income and support

 

For you to qualify for the adult-dependent exemption, in most cases your parent must have less gross income for the tax year than the exemption amount. (Exceptions may apply if your parent is permanently and totally disabled.) Generally Social Security is excluded, but payments from dividends, interest and retirement plans are included.

 

In addition, you must have contributed more than 50% of your parent’s financial support. If you shared caregiving duties with a sibling and your combined support exceeded 50%, the exemption can be claimed even though no one individually provided more than 50%. However, only one of you can claim the exemption.

 

Keep in mind that, even though Social Security payments can usually be excluded from the adult dependent’s income, they can still affect your ability to qualify. Why? If your parent is using Social Security money to pay for medicine or other expenses, you may find that you aren’t meeting the 50% test.

 

Housing

 

Don’t forget about your home. If your parent lived with you, the amount of support you claim under the 50% test can include the fair market rental value of part of your residence.
If the parent lived elsewhere — in his or her own residence or in an assisted-living facility or nursing home — any amount of financial support you contributed to that housing expense counts toward the 50% test.

 

Other savings opportunities

 

Sometimes caregivers fall just short of qualifying for the exemption. Should this happen, you may still be able to claim an itemized deduction for the medical expenses that you pay for the parent. To receive a tax benefit on your 2017 (or 2018) return, you must itemize deductions and the combined medical expenses paid for you, your dependents and your parent for the year must exceed 7.5% of your adjusted gross income.

 

The adult-dependent exemption is just one tax break that you may be able to employ to ease the financial burden of caring for an elderly parent. For 2018 through 2025, while the exemption is suspended, you might be eligible for a $500 “family” tax credit for your adult dependent. We’d be happy to provide additional information. Contact your Smolin professional to learn more.


Comments

Security Check
Please enter the text below
CaptchaImage
Can't read text above? Try another text.
co workers
May 10, 2018
co workers
What a really awesome post this is. Truly, one of the best posts I've ever witnessed to see in my whole life. Wow, just keep it up. Turnips
co workers
May 10, 2018
co workers
Very interesting blog. Alot of blogs I see these days don't really provide anything that I'm interested in, but I'm most definately interested in this one. Just thought that I would post and let you know. Coconut Oil
co workers
May 10, 2018
co workers
They're produced by the very best degree developers who will be distinguished for your polo dress creating. You'll find polo Ron Lauren inside exclusive array which include particular classes for men, women. Jackfruit
co workers
May 10, 2018
co workers
Really impressive post. I read it whole and going to share it with my social circules. I enjoyed your article and planning to rewrite it on my own blog. Calcium
co workers
May 10, 2018
co workers
Very nice article, I enjoyed reading your post, very nice share, I want to twit this to my followers. Thanks!. Curry Powder
co workers
May 10, 2018
co workers
Your content is nothing short of brilliant in many ways. I think this is engaging and eye-opening material. Thank you so much for caring about your content and your readers. Kelp