If you can satisfy a few tests imposed by the Internal Revenue Service, you’re allowed to claim your mother as a dependent. Dependents lower your taxable income. This allows you to keep more of your earnings to invest for the future when you’re Mom’s age. In addition, if you’re single, having Mom as a dependent qualifies you for a filing status with lower tax rates. Mom can be your dependent regardless of whether she lives with you.
Claiming Parents as Dependents
Claiming your mom as a dependent is only possible if her annual income is less than an amount established yearly by the Internal Revenue Service. This figure is adjusted annually for cost of living. Total Mom’s income from all sources that are not exempt from federal tax, including unemployment benefits. Exclude Social Security benefits from the calculation. If Mom has a rental property, count only the gross rent received without deducting any expenses. The key reason you’re allowed to claim Mom as a dependent is that you provide most of her support. Make sure you pay more than half the cost for her food, lodging, clothing, medical care, education, health insurance premiums, transportation and recreation. Also include large purchases, such as furniture, appliances and automobiles. If Mom doesn’t pay any rent for lodging you provide, use a value that is the amount you would charge a stranger for the same lodging.
If you’re unmarried and your mother qualifies as your dependent, you can use a tax filing status called Head of Household. The tax rates are lower than filing as single, which is your status if you’re unmarried without dependents. So, you capture another tax break in addition to claiming the dependency exemption for Mom. To qualify for Head of Household, you must pay more than half the cost of keeping up a home you share with Mom. If your mother lives apart from you, filing as Head of Household is still permitted if you pay half the cost of keeping up the home occupied by Mom. This includes the cost of a retirement or nursing-care facility.
It's important to understand what dependent parents means. You can possibly claim Mom as a dependent even if you don’t provide half of her support by yourself but have an arrangement with someone else to jointly provide half of Mom’s support. As long as your share is at least 10 percent of Mom’s support, you’re allowed to claim her as a dependent. But, the catch is that the other people providing half of Mom’s support with you must agree in writing. The IRS requires attachment of Form 2120 to your tax return. This is a Multiple Support Declaration identifying the other people who provide more than half of your mother's support with you. The form confirms their acceptance of your claim for your mother as your dependent.
2018 Tax Credit Change
The new tax bill has an important credit for those claiming parents as dependents. You'll receive a $500 credit, subject to income phaseouts starting at $200,000. This credit is set to expire in 2025.
Claiming on 2017 Taxes
In 2017, your qualifying relative dependent could not have an adjusted gross income of more than $4,050 if you're claiming parents as dependents. However, if your mom is disabled and that income comes from a sheltered workshop, that is an exception to this rule.
- IRS.gov: Publication 501
- IRS: Exemptions, Standard Deduction, and Filing Information For use in preparing 2017 Returns
- Intuit Community: What is the new gross income threshold for 2018 for dependents now that the peronal exemption is gone?
- CNBC: 10 tax changes you need to know for 2018
- Saving to Invest: $500 Non-Child Dependent or Flexible Credit in Trump/GOP Tax Reform Bill
Brian Huber has been a writer since 1981, primarily composing literature for businesses that convey information to customers, shareholders and lenders. Huber has written about various financial, accounting and tax matters and his published articles have appeared on various websites. He has a Bachelor of Arts in economics from the University of Texas at Austin.