Hi all,
I'm looking to learn more about the pros and cons of claiming a parent as a dependent.
Based on the IRS requirements I can claim my mother as a dependent. She receives SS but has no other income, has no savings, no investments. She lives in a house I pay the mortgage on so I cover more than 50% of her expenses. My mother is healthy so there are no medical bills at this time but my workplace does offer a Dependent Care Account benefit I could contribute to for certain expenses.
It would be great to hear about others experiences or read any links the community can provide. I did a search of the forum and didn't see many posts on this topic--please point me in the right direction if I missed them.
1. Any one have personal experience claiming a parent?
2. Are there any downsides?
3. Does it put me on the hook for anything I wouldn't be responsible for if I did not claim her?
4. One pro is the tax credit. Are there any others?
Thank you!
Our situation is nearly identical to yours. We have claimed my mother most years for the past 8. We own the house she lives in (rental equivalent cost about 750$/mo) and pay all her utilities as well. She owned nothing except a few household possessions and furniture. No savings or investments until recently, income of about 900$/month to live on after Medicare costs are subtracted.
I did not find any downside to claiming her as a dependent. You can change that filing claim from year to year; and, in fact, we did not claim her for a couple of years where she received a small inheritance and spent big chunks of it on health and dental expenses, which put her spending outlay at a few percentage points over ours for those years.
The tax credit amounts to about 900$ IIRC, which is a drop in the bucket on what we spend to help her, but is better than nothing. However, I think (might be wrong) that the non-child dependent credit is going to be changed or phased out under this new tax law, so I'm not sure even this help will be available in the future to those of us supporting elderly parents.
The downside of claiming my mother as a dependent was that it meant she did not meet the income/asset requirements for state-assistance (SNAP type benefits, utility offsets, etc.) even with less than 1000$/month of income. However, those benefits would not have made up for the amount we were spending (i.e., her standard of living would have been lower), so this is the path we chose.
