As our parents age, we may find ourselves caring for them the same way they did for us when we were children. But caring for a loved one is complicated. One way to make the process simpler is by claiming your elderly parents as dependents. Doing so provides financial comfort to your parents’ care.
For a parent to be claimed as a dependent, they must meet the requirements outlined by the IRS. This includes their financial and residency status.
Claiming a parent requires verifying their eligibility, gathering relevant documentation, and filing the paperwork.
What is a Dependent?
In the United States, a dependent is someone who relies on another person for financial support. In the context of tax returns, a dependent can be a child, a relative, or even a parent who meets specific IRS criteria.
For caregivers, filing a dependent can ease pressure on their finances and allow them to provide better care for their elderly parents.
Requirements for Claiming Your Elderly Parent as a Dependent
To claim an elderly parent as a dependent, you must first make sure that your parent meets the qualifications set by the IRS. There is no specific age requirement for claiming a parent as a dependent. Eligibility is based on meeting the appropriate financial and residency criteria. These criteria include:
- Gross Income: For tax year 2024, your parent’s gross income must not exceed $5,050
- Support Provided: You must provide more than half (over 50%) of your parent’s total financial support for the year. Support can include paying for their senior living accommodations, medical bills, and other necessary expenses. Keep a detailed record of all financial contributions in order to verify your claim.
- Residency Status: Your parent must be a U.S. citizen, U.S. national, or a resident foreigner with either a Social Security number or an individual taxpayer identification number (ITIN)
- Living Situation: Unlike claiming children, claiming your parent as a dependent does not require them to live with you. However, you must be able to provide proof of relationship to confirm that your dependent is your parent. This includes biological parents, adopted parents, step-parents, or in-laws.
The deadline to claim your elderly parent as a dependent in the United States aligns with the general tax filing deadlines. In 2024 this tax deadline was April 15.
Benefits for Claiming a Dependent
The major benefit to claiming an elderly parent as your dependent includes tax credits and deductions for the primary care individual of the dependent. These include:
- Tax Deductions and Credits: By claiming your elderly parent as a dependent, you can potentially qualify for the Credit for Other Dependents, which can provide up to $500 per dependent.
- Medical Expense Deductions: If you itemize deductions, you can include your parent’s medical expenses, along with your own. If your parent qualifies as your dependent, you might be able to include them in your health insurance plan, potentially reducing their healthcare costs.
- Dependent Care Credit: If you pay for someone to care for your parent while you work, you may qualify for the Dependent Care Credit.
When Can You Claim an Elderly Parent as a Dependent?
If you find that you are contributing a significant portion of your parent’s financial support, it may be time to consider claiming them as a dependent. Claiming a dependent may influence your tax bracket or eligibility for other tax credits.
Fortunately, your parents don’t need to live with you in order for you to claim them as dependents. If your parents are currently living in a senior living community, then you are still eligible to claim them—as long as the requirements for the application are met.
How to Claim an Elderly Parent as Your Dependent
Before claiming a dependent on your taxes, it is important that you understand the criteria required for such a claim. Connecting with a tax professional can help you with this journey. However, the process generally includes:
- Determine Eligibility: Ensure your parent meets the IRS criteria for gross income and support received.
- Gather Documentation: Collect all necessary financial documents, including proof of income, medical expenses, and records of financial support you provided.
- Complete IRS Forms: Fill out the appropriate IRS forms when filing your tax return. Your parent’s information should be included on any relevant forms.
- File Your Tax Return: Submit your tax return with the completed forms and supporting documentation. Keep detailed records of all financial transactions, including receipts, bank statements, and medical bills. This documentation will be crucial if the IRS questions your claim.
What if My Claim is Rejected?
Filing the appropriate paperwork does not guarantee that the IRS will accept your claim. If your claim is rejected, there are several steps you can take to address this.
- Review the Rejection Notice: Carefully read the notice from the IRS to understand their reasons for the rejection. The notice will provide details on why your claim was denied and any required actions on your part. Double-check that your parents meet the IRS requirements, and collect all relevant documentation that you need to support your claim.
- Correct Any Errors: If the rejection was due to an error or missing information in your tax return, correct these mistakes and resubmit the return. Make sure all necessary forms and information are accurately completed.
- Contact the IRS: If you’re unsure about the reason for the rejection, or if you need further clarification, contact the IRS directly. You can call the number provided in the notice or visit an IRS office for assistance.
- Submit an Appeal: If you believe the rejection was incorrect and you have supporting evidence of this, then you can file an appeal. Follow the instructions in the rejection notice for how to appeal the decision. This typically involves submitting a written explanation and any supporting documents to the IRS.
- Amend Your Tax Return: If necessary, file an amended tax return with the correct information and any additional documentation needed to support your claim.
By taking these steps, you can address the issues identified by the IRS and potentially resolve the matter to claim your elderly parent as a dependent.
Connect With Our Team
Claiming an elderly parent as a dependent can offer financial comfort and provide access to valuable tax benefits. The key is making sure that your family meets the appropriate requirements.
Our community at Peregrine Senior Living Guilderland can put you in touch with individuals and resources to provide guidance as you navigate this financial sector. Connect with our team to learn more!
