Claiming my Parents

Today TaxMama hears from April in California, who’s done some research. “I’d like to include my parents as qualifying dependents on my 2009 personal tax return (single). My father has been out of luck in the job market since late 2008, and has been collecting unemployment insurance. Their interest income plus unemployment would be over $3500 (no earned income at all). To confirm what I read from IRS publication, if their AGI is over $3500, I cannot use their exemptions, but I can still file as HOH (to get higher deductions) if I pay over half of upkeep expenses for their residence?”

TaxMama answers Tax Questions

Hi April,

This is really a tough time. And it is time for Dad to face up to the fact that he’s not going to find a job in his field at his old salary any time soon. It’s time to take something else, or to train for something else – before the unemployment runs out. In fact, it may be time for Mom to look at getting some training – just for self-preservation.

As to whether or not you can claim your parents as dependents? Or for you to qualify as head of household (HOH)?

1) For HOH, you must pay more than half the total cost of keeping up their household. Here’s a worksheet to use. http://www.irs.gov/publications/p17/ch02.html#en_US_publink100032149

2) For the exemption: http://www.irs.gov/publications/p17/ch02.html#en_US_publink100032152

You have to qualify on TWO counts:

a) You have to pay more than half the cost of keeping up their household.

AND b) they have to qualify as your dependents.

If (b) doesn’t happen, you can’t use the HOH status.

So, your parents have to meet the Gross Income Test.
Gross Income Test – To meet this test, a person’s gross income for the year must be less than $3,500. That’s per person, not total for both of them!

Here are two ways to see if you can meet this test:

1) California is a community property state. Add up your parents’ income and see if the total comes to less than $7,000. If it does, you can claim both your parents. Then you’d have head of household status and two dependents.

2) If Dad has all the income and Mom only has some interest… see if you qualify to support Mom – and let Dad file his own separate return. Then you’d have head of household status and one dependent.

And remember, you can find answers to all kinds of questions about claiming your parents and other tax issues, free. Where? Where else? At TaxMama.com.
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