Claiming Parents as Dependents for Tax Benefits

Claiming Parents Dependents for Tax Benefits

Taxes make us part with our hard-earned money. It unwillingly sets us back by a few hundred dollars every month. But cheer up! There are a few tax provisions through which you may get some tax benefits, and might not need to pay the whole amount of your income tax. One such provision to get tax benefit is to claim your parents or children or any other relative as dependents.

What is the Meaning of Claiming Parents as Dependents?

It simply means that you want a deduction in tax, as a personal exemption amount, for taking care of the dependent parents. Personal exemption can be claimed by the tax-payer himself or the qualified dependents. This benefit can be enjoyed by the spouse as well in a couple of cases. Simply put, for instance, if I want to be exempted from taxes or at least get some breaks from that, I can claim my parents or children or relatives as dependents, and qualify for tax breaks or tax deduction and few other benefits.

Pre Requisites

Criteria 1
The individual you are claiming as a dependent has to be related to you. Now when you are going to claim a parent as dependent, this is not an issue. In this too, in laws are allowed, but foster parents are not, unless they live with you for a year as a family member.

Criteria 2
Obviously enough, the people you are claiming to be dependents for tax benefits have to be from the same country. If you are filing the taxes in the USA and you are an American citizen, your parents have to be the residents of the USA, Canada or Mexico.

Criteria 3
While claiming parents as dependents on taxes, your parents cannot file a joint return. They should file separately. In case your parent or parents file a joint tax return just to get a refund, then you can think of claiming them as dependents.

Criteria 4
A parent who is being qualified or nominated for personal exemption should have a gross income of more than $3,650 (approximately and this amount is liable to change). This does not include social security payments or tax-exempt income.

Criteria 5
Half of the support for your parents has to be provided by you during the year. The support refers to money spent on basic necessities. Even if you pay for more than 10% of your parents’ total support for that year, and with others expenses, in totality contribute to half of your parents’ support, you can claim parents as dependents on taxes.

Once these terms are taken care of, then the next thing to be done is to file your income tax returns by filing up the form 1040 (or Form 1040EZ/1040A if you qualify), of the Internal Revenue Services (IRS). In the third section there, a subhead titled ‘Exemptions’ would be there. In this section, you would need to list your parent’s first and last name, their relationship to you and social security number. This has to be on line 6c. If only one parent is being claimed, just fill in the number 1 row.

In a similar way, you can go about claiming your children on taxes. Eventually, add up the total dependents, do not forget yourself, your spouse and children if that is applicable. Provide the total number of dependents in the fourth column. You are done!

Give the maximum credit for dependent care you can receive. That is, if you qualify to receive this credit and are going to claim it. In case you are thinking about claiming visiting parents as dependents on taxes, and if you are not sure how to go about it, the best way is to contact the nearest IRS office. This is where I sign off. I hope this wasn’t too taxing!