Supporting your Parents

If you support your parents financially, the federal government wants to help. At tax time, there are a number of different tax assistance options available to parental care providers. The tax season 2018 brings a new dependency tax credit and the ability to claim a dependent from a parent. You may therefore be able to write off any medical expenses your parents have incurred and paid. There are certain requirements that you must meet to claim that your parent is a dependent, so make sure that you understand the rules before you file your taxes. Requirements for Dependent Claim The IRS has a standard definition clause for a dependency. In general, you must be responsible for more than 50% of the annual income of your parent if you want to classify your parent as a dependent.

In contrast to many other dependants, your parents must live in your household. They must, however, have a total taxable income below the $ 4,150. This excludes social security benefits, but accounts for pensions, interests, rental income, dividends and earnings. As a filer, you can not be claimed as dependent on the tax return of another person and your parents can not file a joint return if you are married. The only time your dependent parent can file a joint return with his spouse is when the return is filed specifically for reimbursement and they have no tax liability. Exemption Information If you are eligible to claim your parent as a dependent, only a little information is required when you file your taxes. The 1040 form you use to file your return has an exemption space where you would write the name, relationship and social security number of your parent.

Dependent Care Credit

If your parent required day care services and lived full – time with you in 2018, you may be eligible for the Dependent Care Credit . The credit amounts to 20% to 35% of the costs incurred, up to $ 3,000. The credit takes your income into account when calculating the percentage. There are no rules about exactly what type of care programs are eligible for the loan, but you can not claim expenses if you paid your spouse for care. You can’t value your own time, too, and try to take care of your dependent. Medical expenses You can also deduct their medical expenses if you can claim your parent as an dependent. Things such as prescription medicines or hospital bills you have paid for the benefit of your parent can be deducted. However, like your personal medical expenses, these expenses still fall under the deduction rule that they must exceed 7.5 percent of your previous year’s gross income to be deducted.