Tax Guide

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Claiming a Parent as a Dependent

Tax Law Update: The personal exemption has been eliminated starting with 2018 returns, in favor of a higher standard deduction. So claiming a dependent will no longer give you an exemption to reduce your taxable income. Still, claiming a dependent can provide tax breaks. Here’s how.

Claiming a Parent

Paying more than half of your parent’s household expenses means you are eligible to claim your parent as a dependent.

Unlike children, parents don’t have to live with you at least half of the year to be claimed as dependents – they can qualify no matter where they live. As long as you pay more than half their household expenses, your parent can live at another house, nursing home, or senior living facility. (Be sure to check out the Child and Dependent Care credit.)

Several people can contribute to a parent’s household expenses. This happens frequently when several adult children support a parent. But when several people contribute, it may be unclear who gets to claim the dependent parent, because maybe no one person contributed at least 50% of support. Fortunately, the IRS facilitates an agreement among the contributors with Form 2120 – Multiple Support Declaration. Anyone who contributes more than 10% of the yearly total expense amount should sign the form and give it to the person who will claim the parent. Family members can even take turns claiming the dependent in different tax years.

When you’re doing your taxes with 1040.com and claiming a parent as a dependent, be sure to add a Form 2120 for each person releasing a claim to the parent.

Filing Status

Is your filing status single or married filing separately? Are you paying more than half of your parent’s household expenses? If the answer is yes to both questions, you may be able to file as head of household. That gives you a higher standard deduction, which is a good thing.

But: If you pay less than half of the expenses, or you contribute less than 10% of the total yearly expense and claim your parent as a dependent, you’re not eligible to file as head of household.

Also see:
Who Can You Claim as a Dependent?
Child and Dependent Care

 

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