dependency exemption for a social security recipient

[memik1]

A person wants to claim their parent, a social security recipient (about $9000), on their taxes. The SS recipient lived with them all year and has no other source of income. Can they claim this parent?

[Gretel]

I doubt it. Unless they spend over $9,000 for the parents. I take it that all SS is spend on parents. You have to look at the 50% support test.

[gkaiseril]

It will depend upon how much the parent spent on themselves or saved.

[spencer]

Don't forget

fair rental value of the home divided by the number of bodies living there

[taxdude71]

I've had clients claim their parents in the past. As long as they pass the support test there is no reason that they can't be claimed.

[JohnH]

Similar question with a twist.
Maybe my mind's just mush this morning.

Father had a stroke and is receiving SocSec Disablity. Wife works a public job and income is high enough that 85% of the SocSec Disablity is added to taxable income.

Kids are age 16 & 17. Both work part time and eack kid also receives SocSec due to their father's disablity. Do I show the SocSec Disability on the kid's indiviudual returns? I assume I do because the SSA-1099's are issued with each kid's SocSec# on them. And at what point (if any) would I become concerned about the dependency exemption being lost due to half of total support not being provided by the parents?

[Burke]

Yes, you do show the SS benefit payment (in the name of the kids), on the kids' returns, not the parents. Since both kids work, you probably to have to file for them, even just to get a refund. Child cannot have provided over 1/2 of his own support for parents to claim.

[FEDUKE404]

Does not go on parents' tax return

Similar question with a twist.
Maybe my mind's just mush this morning.

Father had a stroke and is receiving SocSec Disablity. Wife works a public job and income is high enough that 85% of the SocSec Disablity is added to taxable income.

Kids are age 16 & 17. Both work part time and eack kid also receives SocSec due to their father's disablity. Do I show the SocSec Disability on the kid's indiviudual returns? I assume I do because the SSA-1099's are issued with each kid's SocSec# on them. And at what point (if any) would I become concerned about the dependency exemption being lost due to half of total support not being provided by the parents?

The Social Security for the children would appear on their individual income tax returns, although it is unlikely that any of it will be taxable.

As Burke mentioned, with the children (both!) having received those funds, it may be a challenge for the parents to prove they provided more than 50% of the total support.

AND if the parents did not already know, they will eventually receive (annual?) forms from the SSA requiring them to show exactly how they spent those funds for the children's support. The children will continue to receive the SS benefits until they reach age 18 or possibly later if still in high school.

FE

[mwarney]

Social Security benefits are not taken into consideration when determining the "Gross Income" test. So the only consideration would be how much the parent spent on his or her own support. You need to run the numbers on costs to keep up the home and divide it by the occupants. If the parent puts all of his or her money into a savings account, then that parent has spent zero on their own support.

[FEDUKE404]

Be wary of saving Soc Sec funds

Social Security benefits are not taken into consideration when determining the "Gross Income" test. So the only consideration would be how much the parent spent on his or her own support. You need to run the numbers on costs to keep up the home and divide it by the occupants. If the parent puts all of his or her money into a savings account, then that parent has spent zero on their own support.

While you are technically correct on the "gross income" issue, the child's Soc Sec benefits still would appear on his/her own tax return if one was otherwise necessary. (The same would apply to the parents in the OP.) It is, of course, unlikely that any of the benefits would be taxable unless the child has other income, any kiddie tax issues excluded.

As I mentioned earlier, I think the parents might get boxed in by putting the money into a savings account and then having to account to the SSA as to how the money was spent for the support of the children. Trust me - those forms will arrive from the SSA and the custodial person (parent) will need to certify under threat of perjury how the child's SSA funds were actually "spent."

[This issue is related to the question raised by JohnH in this thread]

FE

[mwarney]

While you are technically correct on the "gross income" issue, the child's Soc Sec benefits still would appear on his/her own tax return if one was otherwise necessary. (The same would apply to the parents in the OP.) It is, of course, unlikely that any of the benefits would be taxable unless the child has other income, any kiddie tax issues excluded.

As I mentioned earlier, I think the parents might get boxed in by putting the money into a savings account and then having to account to the SSA as to how the money was spent for the support of the children. Trust me - those forms will arrive from the SSA and the custodial person (parent) will need to certify under threat of perjury how the child's SSA funds were actually "spent."

[This issue is related to the question raised by JohnH in this thread]

FE

Maybe I didn't understand the original question. I thought the question was along the lines of "if my elderly parent moves in with me, can I claim him or her as a dependent even though he or she gets social security?" The answer is yes as long as I provide more than half of his or her support.

[FEDUKE404]

Clarification

Maybe I didn't understand the original question. I thought the question was along the lines of "if my elderly parent moves in with me, can I claim him or her as a dependent even though he or she gets social security?" The answer is yes as long as I provide more than half of his or her support.

You are correct - and FWIW the parent does not even have to "move in" if the circumstances show >50% support by others.

But there are other related issues currently being discussed in this thread....

FE

[JohnH]

Maybe I didn't understand the original question. I thought the question was along the lines of "if my elderly parent moves in with me, can I claim him or her as a dependent even though he or she gets social security?" The answer is yes as long as I provide more than half of his or her support.

The confusion was my fault. I thought the original post had been answered so I inserted a SocSec benefits question about a different situation. I should have started a separate thread with my question.