Dependent Age 23. Not In School. Parents claim he is disabled

[ATSMAN]

New client has a 23 year old son who has some mental disorder (takes medication mandated by state agency) because of a prior criminal matter. Previous tax preparer listed him as a dependent. He does do odd jobs like landscaping, snow cleaning around the neighborhood for cash and worked for a short period at Dunkins (made less than $500), got fired. Parents claim he only earned less than $1000 in 2018. Other than one W2 from Dunkins there is no proof of income. He lives on and off with parents and cousins.

The problem is that parents do NOT have a doctor's letter saying he is disabled.

IRS considers this. But what proof do we need at the time of filing? Is is ok to put him as a dependent to get the $500 tax credit.

1. He or she cannot engage in any substantial gainful activity because of a physical or mental condition and
2. A doctor determines the condition has lasted or can be expected to last continuously for at least a year or can lead to death.

[spanel]

Couple items... If they make to much for EIC, doesn't matter, claim as QR.

If they qualify for EIC, usually the qualifying factor for me is if they are on SSI or Social security Disability.

The fact that he is working multiple jobs, I would say no EIC without the above and maybe not even a QR based off the fact that he had odd jobs with income that is not properly kept with (he very well may have had over $4150 in income)

Chris

[TaxGuyBill]

As Spanel said, if (a) he earned less than $4150 and (b) the parents provided over 50% of his support, yes, he is a dependent (a Qualifying Relative) so the parents can claim the $500 dependent credit. From your description, that sounds like the situation. You may want to get the parents to sign a statement that they meet those requirements.

If either of those requirements are not met (or if the parents qualify for the Earned Income Credit), then you need to determine if the son is "totally and permanently disabled".

As Spanel also said, I'm not comfortable making the determination (even with a doctor's note), and generally rely on if the child is collecting Social Security Disability. You may want to encourage the parents to apply for that.

[ATSMAN]

I was just told that the fellow has applied for SSI. So I told them that assuming the income was below the threshold I will do a 1040X when SSI is approved.