Family has special needs child who has turned 18 and is now receiving her own social security. She has to pay rent of $250 per month to her parents. How is this reported? Do the parents have to report rent and then do they take off a percentage of the home utili, ins,taxes, etc? Any resources on this?
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She "HAS TO" pay rent?Originally posted by JenMO View Post
I have a couple of clients with adult retarded sons. The sons have a low-paying job. In one case the parent claims the son as a dependent. In the other case, the son claims himself.
The "rent" is possibly the child's contribution to his own support rather than rent that should be reported on Schedule E. It may or may not be over half of his support.
More information would be necessary to decide on this.
You look at the rules for claiming a dependent which might enable you to decide how to handle it. -
Mom says ss requires her to pay rent, some sort of spend down? I'm not sure. Before she was 18, she rec'd soc sec but it was her number in care of mom, now I guess it's just her money.Comment
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I have a cousin with a disabled son who is in his 20's now. His social security comes in his name. I have never heard her say that social security requires him to pay rent. Maybe mom misunderstood a question or comment made by social security.
But I would think it would be reasonable for the adult child to contribute something to household, at least food costs.
If mom has been claiming the child all along and getting social security the only thing that has changed is the recipient is now the adult child instead of the mother. So I wouldn't think it would change how tax return is done.
Linda, EAComment
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SS may have told the mother that they may require a report that shows the yearly expenses of the person receiving the benefit. They may have given examples of what should be included in the expenses paid out of the benefit. The 250. is support, not rent. It is the beneficiary's portion of household/support expenses. The parents should take dependent on their return and if any withholding was on his W2 he should be filed as a dependent to get a refund of the withholding.Believe nothing you have not personally researched and verified.Comment
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In some cases mentally disabled children are able to work and might be able to claim themselves as an exemption and get an EIC.
the rental value of the child's housing and other parent-provided support would have to be considered in determining whether the child was a dependent or not.
The EIC to the child might be worth more than the value of the exempion on the parent's return.Comment
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