I am taking care of my parents by providing them housing free of charge and utilities. I also fully pay for groceries and nearly all their expenses.
One of my parents has dementia and I paid my brother 10k to look out for them while I focus on work.
Both of my parents made about 12k a year in interest from their nest egg savings accounts. The earn about 17k in combined social security so it seems like they don’t even reach the limit even file their taxes.
Can I claim head of household and get the dependent care credit as well? Is there anything I can add?
Claiming Elderly Parent(s) as dependent and dependent credit.
byu/SnooPears2424 intax
Posted by SnooPears2424
3 Comments
The 12k will put at least one of them over the limit to claim a dependent that is not a qualifying child (qualifying relative).
An adult with over $4300 in income (not counting social security) cannot be claimed as a dependent. If your parents have interest income of around $12k, that is over the limit and you can’t claim them.
You’ve gotten correct guidance so far, and I think you’re probably out of luck this year, but the stars could align for the future. This starts with whether the “$12k” you wrote, is each ($24k total) or combined. If the former, you’re out of luck. If the latter then there may be a chance, since interest rates are dropping and they may have the option to have a slight reduction in taxable income that will get them under next year’s cutoff which will be ~$5400 each.
If you aren’t in a community property (CP) state, then they might be able to restructure their savings accounts such that most of the interest goes to one of them, allowing the other to be a dependent and more importantly allow you to file as HOH.
As far as this year, if not in a CP state then perhaps their accounts are in individual names rather than held jointly, and maybe one of then already will be under the $5200.