Tax Considerations When Supporting Parents

As I have been helping my Mom transition into life as a widow many interesting facts have begun to resonate. Particularly intriguing for me today under Regs. §1.2-2(b)(4) parent(s) can be claimed as a dependent if you meet the usual support, citizenship, gross income, and joint return tests.

Interestingly enough if you are single you can file as head of household if you claim your parent or pay more than half the cost of keeping them in a rest home or home for the elderly. Fortunately my mom is nowhere ready for that sort of treatment we hope. However in my most recent research efforts I’ve been intrigued by two separate and distinct opportunities worth consideration:

1. Engaging A Multiple Support Declaration

This declaration lets you claim your parent as a dependent even if you don’t provide more than half of their support. This is a smart strategy particularly when two or more siblings help support a parent. Here’s how it works:

• You have to provide more than 10% of the person’s support.
• You and the other contributors jointly have to provide more than half of the person’s support.
• Each of the other contributors has to be eligible to claim the person as a dependent, except that they did not provide more than half of the support.
• Each of the other contributors has to sign the Multiple Support Declaration giving you the exemption.
• File IRS Form 2210 to claim a multiple support declaration.

2. Deducting Medical Expenses

If you claim your parent as a dependent (or if you would be eligible to do so except for the fact that their income exceeds the $3,900 exemption amount), you can deduct medical expenses you pay on your parent’s behalf (including long-term care costs) on your own return. If you’re single, claiming your parent may let you file as head of household, even if your parent lives in a nursing home. Please be aware that long-term care insurance premiums eligible as a medical deduction are as of the date of this posting capped, as follows:

Parent Age                     Annual Limit

40 or less                       $370
41-50                              $700
51-60                              $1,400
61-70                              $3,720
Over 70                           $4,660

Original Post By:  John Dundon

Enrolled with the United States Treasury Department to practice before the IRS, governed by rules stipulated in United States Treasury Circular 230. As a Federally Authorized Tax Practitioner and a tax appeals specialist my Enrolled Agent License #85353 is issued by the United States Treasury. With this license I work for U.S. taxpayers everywhere to resolve tax matters and de-escalate stress about taxes or tax disputes for individuals and corporations with federal and state issues.

Facebook Twitter LinkedIn 

Subscribe to TaxConnections Blog

Enter your email address to subscribe to this blog and receive notifications of new posts by email.