Dependent is on Social Security Disability

[Harvey Lucas]

My Client supports his girlfriend who lives with him and has no income other than her the Social Security Disability checks of about $400 per month.

I suggested that he claim her as a dependent on his tax return since he supports her and she has no other income.

She is concerned that if he claims her as a dependent that this will somehow affect her eligibilty for her Disability checks.

Does she have a valid concern?

Harvey Lucas

[MLINDER42]

ss disability

As long as he contributes more than 50% of her support he can claim her as a dependent.I have many clients that claim a dependent who is on disability.

[taxmandan]

It depends..... (typical accountant response)

I'm not sure about SSI, but some gevernment payments are means tested for eligibility and can be lost if the person is claimed as a dependent on a tax return. Does the girlfriend have to file annual income/living statements or such with the agency that is paying her disability? That would indicate that further inquiry would be necessary to avoid her losing benefits from being a tax dependent.

[JohnH]

I'd suggest advising him of the tax rules, including how much the dependency exemption will likely save him, and the caution him to thoroughly investigate the "loss of benefits" angle. I wouldn't speculate about that in any manner - just be sure he understands it's his job to get educated on that point.

People tend to hear what they want to hear, and if you don't run up a couple of bright red flags you might find him later asking why you gave him tax advice that cost the girlfriend her benefits.

[OtisMozzetti]

girlfriend who lives with him and has no income other than her the Social Security Disability checks of about $400 per month.

Harvey Lucas

The girlfriend seems to provide about $400 per month of her own money toward her support, in other words around a little more than $5000 per year of her own support. The client needs to make sure whether or not he does provide more than 50% of his girlfriend's total support.

The girlfriend does not have gross income more than the personal exemption amount since the Social Security is nontaxable according to the Social Security worksheet.

[appelman]

Don't confuse social security disability with SSI!

Don't confuse social security disability with SSI! The former is not means-dependent.

[Deductor]

Are they living in sin (not Cincinnati)?

Remember that you aren't supposed to claim an exemption for an arrangement that violates local law.

[erchess]

Deductor

I don't have a cite but I believe the rules have changed on that. When was the last time you heard of anyone being prosecuted for sex acts between consenting adults unless the problem was where and when they were done for example in public? The Supreme Court said in the 90s that pretty much any law prohibiting sex between consenting adults would be unconstitutional.

[OtisMozzetti]

Don't confuse social security disability with SSI! The former is not means-dependent.

I have no evidence that Social Security disability has been confused with supplemental security income (SSI), certainly not by me. If the person has been receiving Social Security because that person is disabled, then that would be Social Security disability which is taxed according to the Social Security worksheet. If the person were receiving SSI, then that is never taxed.

Another favorite misconception by many taxpayers consists of the following reasoning, "I collect [some sort of pension or benefit on account of ] disability; therefore, it isn't taxable."