If your mom or dad is elderly or ill, you may be wondering, “Can I claim my parent as a dependent?” The short answer is maybe. That’s because certain tests must be met to claim someone as a qualifying relative. Here’s what you need to know.
IRS Rules For Claiming a Parent as a Dependent
The IRS has specific guidelines in place to determine whether you can claim your parent as a dependent on your tax return. To be considered a qualifying relative, your parent must meet the following criteria:
- Must not be your qualifying child.
- Must be your mother or father by blood (biological – half or full), adoption, or marriage. This includes step-parents and in-laws.
- Your parent must have less than $4,700 (2023 tax year) in gross income.
- You must provide more than half of your parent’s total support for the year.
Your parent must also be a U.S. citizen, U.S. resident alien, or a resident of Mexico or Canada. Although you are required to provide more than half of their support, your mother or father need not reside with you to qualify. Additionally, unlike the qualifying child test, there is no age requirement under the qualifying relative test.
If your parent is still married and files a joint return, however, they are ineligible to be claimed as a dependent.
Tax Benefits of Claiming a Parent as a Dependent
Claiming a parent as a dependent can provide various tax benefits, such as tax credits and deductions for certain expenses.
Child and Dependent Care Credit
Does someone care for your parent while you work? You may be eligible to claim the Child and Dependent Care Credit. To qualify, you must have earned income during the tax year. You must also include the contact information (name and address) for the caretaker, as well as their Social Security number (SSN) or Employer Identification Number (EIN).
Depending on your income, you will receive a credit of 20% to 35% of the qualified expenses paid. For the 2023 tax year, the maximum amount of expenses you can claim is $3,000 for one dependent or $6,000 for two or more qualifying persons.
Credit for Other Dependents
In addition to the Child and Dependent Care Credit, you may also qualify to claim the Credit for Other Dependents when claiming your parent as a dependent. This non-refundable tax credit has a maximum value of $500. It begins to phase out if your income exceeds $200,000 (single) or $400,000 when filing a joint return. You can check your eligibility for this tax credit by using the free tool on IRS.gov.
Medical Expenses Deduction
If you’re caring for your elderly or ill parent, chances are that you have some medical expenses. Thankfully, you can deduct any unreimbursed medical and dental expenses that exceed 7.5% of your adjusted gross income (AGI) if you itemize when filing. Should you opt to take the standard deduction, you will not be able to deduct these expenses on your tax return.
Speak to a Tax Professional If Needed
It’s important to explore all available tax credits and deductions to maximize your tax savings while caring for your parents. Consulting with a tax professional who specializes in elder care can provide valuable guidance and ensure you take full advantage of these benefits.
If you have any further questions or need assistance with tax planning and preparation, contact Tax Defense Network. We’re here to help you navigate the IRS rules and maximize your tax benefits when claiming a parent as a dependent. Call 855-476-6920 for a free consultation today.