Family caregivers contribute both their time and money to help support those they dear. When revenue enhancement fourth dimension rolls around, it's of import to sympathise that you may be able to claim your care recipient as a dependent on your federal income taxation return and lower your tax bill.

Fundamental IRS Rules for Claiming Dependents

To begin, in that location are a few rules that make up one's mind who may merits a dependent and who may be claimed as a dependent:

  • Yous can't merits whatever dependents if you (or your spouse if filing jointly) could be claimed as a dependent by another taxpayer.
  • Yous tin't claim a married person who files a joint return every bit a dependent unless that articulation return is filed but to claim a refund of withheld income taxation or estimated tax paid.
  • Y'all can't claim a person equally a dependent unless that person is a U.S. citizen, U.S. resident alien, U.S. national, or a resident of Canada or United mexican states.
  • Yous tin't claim a person equally a dependent unless that person is your "qualifying relative."

The IRS Qualifying Relative Test

There are four additional criteria that must be met for a intendance recipient to exist considered your qualifying relative. The offset is very simple: they cannot exist the qualifying relative of any other taxpayer. The concluding three tests are explained in detail below. If all these requirements are met, then y'all can claim your intendance recipient as your dependent.

The Human relationship or Member of Household Exam

A qualifying relative must be related to y'all by blood or marriage or must live with you lot all yr as a member of your household (and your relationship must not violate local law). However, a person cannot be your qualifying relative if they were your spouse at whatsoever bespeak during the tax year.

Straight relatives practice not accept to alive with you lot to count every bit a qualifying relative for taxation purposes. Examples of directly relatives include your mother, father, grandmother, grandfather, stepmother, stepfather, mother-in-law, father-in-law, aunt, uncle, brother, sister, stepsibling, and half sibling.

If y'all wish to claim a non-relative equally a dependent, such as a friend, they must have lived with you for the entire twelvemonth to count as a qualifying relative in the eyes of the IRS. A non-relative is still considered to be living with y'all fifty-fifty if they spend fourth dimension in the infirmary or reside in a nursing home indefinitely. These scenarios are considered temporary absences, merely similar vacations or business trips.

The Gross Income Examination

A qualifying relative's gross income for tax year 2022 must exist less than $4,300.

The IRS defines gross income as "all income in the grade of money, property, and services that isn't exempt from revenue enhancement."

If a senior'southward simply income consists of Social Security benefits, generally they aren't considered taxable. Withal, if they have other income from sources similar retirement accounts, pensions, interest and dividends, then a portion of their benefits may be taxable. Co-ordinate to the Social Security Administration, approximately 40 percent of Social Security beneficiaries have to pay income taxes on their benefits.

IRS Publication 915 tin can help you determine if a loved i's Social Security benefits are taxable.

The Support Examination

You must have provided more than half of your potential dependent's financial back up for the yr, including food, housing, clothing, medical expenses, transportation, etc.

If the person lives with yous, you must calculate the fair rental value of their accommodations. This is the amount yous could expect to charge a stranger for the aforementioned kind of lodging, and it might include a reasonable percentage of your mortgage payment, utilities expenses, use of article of furniture and other household costs.

Once more, direct relatives practise not have to alive with you to count as a qualifying relative. Whether they live in their ain dwelling house, in an assisted living facility or in a nursing abode, the expenses you cover for their support at those locations count toward the IRS back up test for dependents.

To summate the corporeality of support you lot provide, compare your full contributions for the calendar year to the full amount of back up your loved one received from all sources for the year (including taxation-exempt income). This latter figure includes personal funds, just merely those actually spent on supporting themselves. Caregivers can use the IRS Worksheet for Determining Support to break down this fiscal comparison.

Shared Caregiving Responsibilities and Multiple Support Agreements

Oft more than one person is involved in providing care and support for an elderly loved 1. For example, y'all, your brother and your sis assist support your mother. Together, you three provide more than half (60 percent) of her back up. Y'all provide 25 percent, your sister provides 25 percent and your blood brother provides x percent. The IRS rules state that an private must provide more than than one-half of a person'southward support to claim them as a dependent, just cases like yours are treated differently.

According to the IRS, a multiple support agreement may be needed "when two or more persons, each of whom would be able to claim the person as a dependent just for the back up test, together provide more half of the person'due south back up. When this happens, you tin concord that any one of you lot who individually provides more than ten percent of the person's back up, but simply one, tin claim that person equally a dependent. Each of the others must sign a statement agreeing not to claim the person as a dependent for that yr."

And so, continuing with this instance, your brother does not qualify to claim your female parent as a dependent because he does not provide enough of her support. Both you lot and your sister qualify to claim Mom every bit a dependent, simply you must make up one's mind between yous who will do then since she can simply be claimed once. If information technology'southward decided that you will claim Mom, and so your sister volition need to sign a argument waiving her right to claim Mom as a dependent for that tax year (you'd salve this for your own records). You volition also need to file Grade 2120 (Multiple Back up Declaration) along with your revenue enhancement return.

If you lot collaborate with others to support a loved ane, make certain you are all on the same page and then you don't meet trouble with more one person claiming the individual on their tax returns.

How Claiming a Dependent Can Bear upon Your Taxes

You may qualify for tax credits, such as the Credit for Other Dependents and/or the Child and Dependent Intendance Credit, if the criteria in a higher place are met and you can claim your loved one as your dependent. Additionally, if y'all itemize deductions instead of taking the standard deduction, you may be able to deduct your loved 1'southward unreimbursed medical expenses and dental expenses.

Challenge your intendance recipient as your dependent can lower the taxes you owe and aid you recoup some of the outlays you have made on their behalf. If you are unsure about what credits and deductions you are eligible for, it is ever best to consult a qualified tax professional for assistance.

For more information on challenge an elderly relative as a dependent, meet IRS Publication 501: Dependents, Standard Deduction and Filing Information.