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Can You Claim Your Parent as a Dependent?

May 23, 2024

Do you pay over half the costs to support a parent (or another loved one)? They may be considered your dependent for federal income tax purposes. Read on.

Claiming your parent as dependent comes with some significant tax breaks, including the dependent care credit, the $500 nonchild dependent credit and itemized deductions for medical expenses. You might even qualify for the favorable head-of-household filing status with a dependent parent. Here are the details.

Nonchild Dependent Credit

Under current law, through 2025, you can claim a $500 credit for dependents that don’t qualify for the child tax credit. To be eligible, you must pay over half of your parent’s support for the year. Your parent also must pass a gross income test to be treated as your dependent for purposes of this credit. For 2024, the threshold for passing this test is $5,050 of gross income, excluding any tax-free Social Security benefits.

Beware: The credit is phased out for taxpayers with adjusted gross income (AGI) above $200,000 ($400,000 for married couples who file jointly).

Dependent Care Credit

You may be able to claim a nonrefundable dependent care credit that covers eligible expenses to care for a qualifying individual so you (and your spouse if you’re married) can work. You can claim this credit for your parent if he or she:

  • Lives with you for over half the year,
  • Is physically or mentally incapable of self-care, and
  • Qualifies as your dependent, without regard to the gross income and joint return tests, or the rule prohibiting a dependent from having dependents.

The maximum credit is $1,050 if you pay at least $3,000 of eligible expenses (35% of $3,000) if your AGI is $15,000 or less. The 35% credit percentage is reduced by 1% for each $2,000 of AGI above $15,000 through $43,000. If your AGI exceeds $43,000, the credit rate falls to 20% of eligible expenses, for a maximum credit of $600. The maximum credit doubles if you pay eligible expenses for multiple qualifying dependents.

Important: Expenses that qualify for the credit must be employment-related. When claiming the credit, you’ll need to provide information about the care provider, including their name, address and taxpayer identification number, on your federal income tax return. Although the caretaker doesn’t need to be medically licensed, not just anyone qualifies. For instance, the IRS doesn’t consider certain family members — such as your spouse or dependent child — qualified care providers for purposes of the credit. Additional rules also apply for people who are considered household employees.

Bonus: If your employer offers dependent care flexible spending accounts (FSAs), you also may be able to contribute up to $5,000 of pre-tax dollars from your salary ($2,500 if married and filing separately) to an account for qualified care expenses for 2024. For example, if you’re in the 24% tax bracket, you’ll save $240 in federal taxes for every $1,000 spent on dependent care with an FSA. But you can’t claim the same expenses twice when taking advantage of both the dependent care credit and the dependent care FSA.

Medical Expense Deductions

You can claim an itemized deduction for medical expenses paid for you, your spouse and your dependents that exceed 7.5% of your AGI. To claim your parent as a dependent for this purpose, you must pay over half of his or her support for the year. The gross income test doesn’t apply for this purpose. But you must pay your parent’s eligible expenses directly to medical service providers.

Healthcare costs for older dependents can be significant, allowing you to surpass the 7.5%-of-AGI threshold. In addition to costs of doctor’s visits and other routine medical expenses, your parent’s medical expenses may include Medicare insurance premiums and qualified long-term care (LTC) insurance premiums (subject to age-based limits). For 2024, the maximum LTC premium is $4,710 for dependents ages 61 to 70 ($5,880 for dependents over age 70).

Head of Household Filing Status

Unmarried taxpayers in lower tax brackets may be able to save significant tax dollars by using the “head of household” filing status instead of the less-favorable single filing status. For example, for 2024, the 22% tax rate applies to head of household filers with ordinary income between $63,101 and $100,500, compared to between $47,151 and $100,525 for single filers.

*There’s no difference between the head of household and single brackets for taxpayers in the 32%, 35% or 37% brackets — and minimal difference for filers in the 24% bracket.

To be eligible for the head of household filing status, you must pay over half the cost of maintaining the dependent parent’s principal home for the year. (You’re not required to live in the same household as your dependent parent.) Any tax-free Social Security benefits are considered for purposes of determining if you pay over half of an individual’s support. Your parent also must pass the gross income test (mentioned above).

June Landry CTA

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