Support issue for claiming a brother as dependent

[WhiteOleander]

Have a client that might be able to claim two of his brothers as dependents.

They all live in the same apt. that brother #1(age 50) pays for. All bills, rent, food, etc. Brother #2 (age 46) and brother #3 (age 54) did not work at all in 2006.

Both brothers #2 & #3 had fairly serious health issues and were hospitalized for about 2 weeks each. They had no assets and were not able to pay anything for the hospital bills. State has paid the bill.

Since the state paid the large medical bills, does this knock out brother #1 from having provided over half of the support? (although they haven't seen the bills, they were probably at least $30,000.)

[taxea]

As long as they lived with him the entire year they qualify as his dependents. I seriously doubt the medical expenses would disqualify since this is not ordinary support expenses.
taxea

[solomon]

Agree

with taxea. The support worksheet excludes medical that is paid by insurance.

[Bees Knees]

Is it insurance? Or is it welfare?

Line 23 of the Worksheet for Determining Support on page 18 of Pub 501 says,

"Enter the amount others provided for the person’s support. Include amounts provided by state, local, and other welfare societies or agencies. Do not include any amounts included on line 1. ."

If the state is providing medical support in the form of some kind of subsidized welfare program, that counts as support provided by someone other than the taxpayer or dependent.

[WhiteOleander]

Yes, that's my concern. I can't find much that addresses this specfic circumstance.

If the state had not paid and they each owed the bill, even though not paid, would that change the situation?

[jainen]

one of the key problems

>>Since the state paid the large medical bills, does this knock out brother #1 from having provided over half of the support?<<

This is one of the key problems that lead to the Qualified Child rules in which 3rd party support payments can be ignored. It seemed unfair that a welfare parent couldn't claim her own child. Perhaps that's less poignant in the case of an adult brother.

Fair or not, the current rules say that unless your brother is a qualified child you can't claim him as a dependent when you don't support him. Medical bills are a support item and it is not difficult to find out how much was paid. Of course, if it was not paid during the tax year then it is not counted.

[George Boutwell]

[QUOTE=jainen;37313 unless your brother is a qualified child you can't claim him as a dependent when you don't support him. [/QUOTE]

Of course, if the brother is totally and permanently disabled (which, of course, does not mean "totally and permanently disabled") then he is a qualifying child regardless of age.