claiming dependent

[oceanlovin'ea]

New client (referred by his father) has to do returns from 2003 on. They all have refunds but he will only get refund for the past 3 years. (For that he was shocked and disappointed)

He has a woman who lives with him. She has MS and no family. She is not able to work. He says he is her caregiver....platonic relationship.He wants to claim her as a dependent.

It makes no difference on the older returns. He won't get an of the money back anyway. So I left her off the returns. But on the current returns it does change the amount of the refund he would get if I put her on the return as a dependent. So I was going to.
Will this throw up a flag if I don't claim her in the older returns but put her on the current ones?

Also he said that she started to get SS disability last year. I need to check to see if that will affect his being able to claim her as dependent. page 3-21 lists "certain social security and railroad tier 1" under both taxable and non-taxable. So I need to find out the difference.

I appreciate your help with this one ( and all the others too)

Linda

[WhiteOleander]

The SS that the lady may receive might be non taxable, but your client still has to provide more than half of her support. The SS will be used to determine if he supplied more than half. Use the support worksheet and work through it all.

[DonB]

The SSDI is most likely not taxable to her and do not count as earned income. But, these are her funds used for her support. The support test needs to be investigated to see if he provides over 1/2 of her support. If he does, then it sounds like she would be a dependent. I don't worry about red flags if the return is correct.

[ChEAr$]

As for your first question, since each year stands alone, there will be no red flags since he's not claiming her beyond the 3 years. IRS computers just aren't that smart after all. (grin

[oceanlovin'ea]

LOL. ChEAr$.....that's a good one. They really aren't that smart.

I will have to find out what year she started getting the disability and how much it is. I did send him an email this morning with some questions and have gotten no reply yet. But I wanted it in an email and not just a phone conversation that the relationship is platonic. Love his dad but don't know this guy from Adam and don't trust that he is being truthful totally.

Thanks for everyone's help.

Linda