Claiming Parents As Dependents

[myerstaxes]

Hi All...I have a couple that have never claimed the wifes' parents who have lived with them since 1993...The parents are now in their mid 80's and receive SSI. I believe I have solved the gross income test, since this is all the income they receive and no part of it is considered gross income...Here is the question, they were told by their former preparer that if they claim the parents, the parents will lose their SSI...
Mind you, the parents pay for nothing, no rent, food, even medical co-payments...The most they pay for is their clothing...The daughter and her husband clearly pay more than half of their support...But, the more I read the more I wonder if claiming them as dependents will lose the parents their SSI...
It is strange that the former preparer said this, because that preparer put $6K on their return last year as child care and used the father's SSN as the child care provider!!

Okay, color me confused and tired and it is only February!!

Thanks in advance for your advice...

[Bees Knees]

The part about losing SS if claimed as a dependent is bogus. If the former preparer said that, it was a dumb thing to say.

From IRS Pub 503:

Payments to Relatives or Dependents
You can count work-related payments you make to rela-
tives who are not your dependents, even if they live in your
home. However, do not count any amounts you pay to:
1. A dependent for whom you (or your spouse if you are
married) can claim an exemption,
2. Your child who was under age 19 at the end of the
year, even if he or she is not your dependent,
3. A person who was your spouse any time during the
year, or
4. The parent of your qualifying child who is your quali-
fying person and is under age 13.

Note that a grandparent is OK to pay for the dependent care credit, unless the taxpayer can claim that person as a dependent.

[dodgedipduck]

The part about losing SS if claimed as a dependent is bogus. If the former preparer said that, it was a dumb thing to say.

Why bogus and dumb?

SSI is not SS. Supplemental Security Income is paid by the SSA. The rules aren't the same as for regular SS. There are also other state rules involved.

Are you sure you know what you're talking about?

[dsi]

I thought SS was counted as "gross income" when trying to determine if the parent met the dependency test?

[myerstaxes]

There is no other income

I thought SS was counted as "gross income" when trying to determine if the parent met the dependency test?

This is true about SS, however, these people have no other income to trigger their SSI being included in gross income...The research that I have done says do not include it if this is the case...
As far as them getting the child care, the father was never paid, they just threw in an amount...

[Bees Knees]

Are you sure you know what you're talking about?

Here is the link to SSI benefits and who qualifies.

http://www.socialsecurity.gov/ssi/text-eligibility-ussi.htm

Please show me where being claimed as a dependent by your kid makes you ineligible for SSI.

[dodgedipduck]

Here is the link to SSI benefits and who qualifies.

http://www.socialsecurity.gov/ssi/text-eligibility-ussi.htm

Please show me where being claimed as a dependent by your kid makes you ineligible for SSI.

'Income includes money you receive from other sources, such as Social Security, workers compensation, unemployment benefits, Department of Veterans' Affairs, friends or relatives; and"

Bogus and dumb? Sounds like the preparer might know what he's talking about.

[myerstaxes]

Okay, What If...

These parents never received cash from their children, but free board and room...If no money changed hands and they clearly provide over 50% by virture of the free room and board, does this count against the parents getting SSI...Cause here in CA there is no way these two elderly folks can live on $700 each a month, without someone helping them in some way...
I read on the SS website, that if a person gets the SSI, they need to prove that they have support to make it with this little money...Or was I dreaming I read it? LOL

[Bees Knees]

Still bogus...maybe even bordering on fraud...

'Income includes money you receive from other sources, such as Social Security, workers compensation, unemployment benefits, Department of Veterans' Affairs, friends or relatives; and"

Bogus and dumb? Sounds like the preparer might know what he's talking about.

OK, I admit I made a mistake. Actually, my original comment was made because I miss-understood the original post. I thought it was about Social Security benefits, not SSI. And then I tried to cover my tracks by looking where it says on the SSI web page that being claimed as a dependent disqualifies you for benefits.

It still doesn’t say that. It only says getting free room and board counts towards income.

But I stand by my original comment about the former preparer’s statement being bogus. Again, it does not say being claimed as a dependent disqualifies you for SSI. It says receiving room and board counts towards the income limit.

The parents are receiving free room and board regardless of whether or not their kid tries to claim them as dependents. So it does not matter whether the kids actually claim them or not, that free room and board counts. And the former preparer should have said that rather than suggest they can continue to commit SSI fraud by not claiming them as dependents.