Can I claim 90 year old mother on my income tax as a dependent? She made $20,000 for the year.

Laurley, whether or not you could claim someone as a dependent used to be a function of the percentage of support, etc. you provided. However, with the new massive tax law changes, I don't know whether that's still the case.

I would either contact a CPA who specializes in elder care, or contact the IRS directly. There used to be a e-mail contact for the IRS. The answers are provided by e-mail, not always quickly, but you have written advice on which you can rely in the event ofn IRS challenge later.

I am not a CPA. Just interested in your post.
My opinion.

For the year 2017 the answer is yes it’s possible.

You have to have provided 51% of the support.

There is a taxable income limit. $4,050. If your parent had that amount in TAXABLE income you can’t claim them as a dependent.

SS does not count as taxable income. Vet A&A would not be taxable income. So your mom doesn’t pay taxes on that income.

If I understand this correctly you would have to show you pay 51% of her “support.”
So not necessarily that you spent $20,200 but that you “spent” 51% more than she spent.
Room, board, etc.

This might be very easy for you to show or not.

So there’s the first step.
1. Does mom have taxable income over $4,050.
Doubtful.

2. Did you provide 51% of her support?

I googled this when you first posted and found a few different mentions on the irs.gov website.

I also found an interesting answer on a CPA website that said your parent didn’t have to use their own income for their support. They could save it! The example they gave was the parent spent $300 of their own money. Their child spent at least 51% more than $300 and so could claim them as a dependent.

Another point was the parent didn’t have to live with their child to receive the deduction.

Additionally if several children are supporting the parent, the children can sign an agreement on which child would have the ability to claim the parent as a deduction for that particular year. A rotation of the benefit.

But all of this is out the window after tax year 2017. AND you have be aware of the A&A rules of eligibility.

Of course you would need to report as income the money you received from mom for providing her aid and attendance.

If I were you I would see a CPA to take advantage of this dependent status for 2017. You might ask them about previous years and file an amendment if this has been going on awhile and you have the records to support your expenses.

I’ve attached one of the blogs I read.

https://blog.turbotax.intuit.com/tax-deductions-and-credits-2/family/can-you-claim-a-parent-as-a-dependent-13842/

Yes, you can claim her as a dependent if you provide over 50% of her support. But as others point out, you may want to speak with a tax professional before doing so.

Even if you can claim her, you shouldn't. The money she gives you is or can be seen as her providing for her own care by paying you to do it. Thus, you would not be able to claim her. It could be viewed as her providing part of her support and you providing part. In that case you could claim her. However, any aid she gets from any government agency would then be subject to your income to determine her eligibility for benefits. In other words, as soon as the government sees that you have claimed her as a dependent, you become responsible for her bills. Social Security and the VA will both get into all of your business about your bills and your income. There will be far more money over all if you are viewed as the person she pays to take care of her. What you lose by not claiming her will be more than made up by her continuing to draw enough funds to pay you. If she is your dependent, then they may give you a small stipend to care for her, but it won't be near what they pay her. And they may very well cut her off completely.

I have been doing this since 2008 and this year made no difference that I could not do this anymore according to intuit’s turbotax and the new tax laws, I just could not receive a dependent care deduction. What I do is file as head of household every year and my mother is my dependent.
I also pay for more than 50% of the expenses in the household. But are you sure you’re paying more than 50 or 51% of expenses, as it seems like she’s paying her own bills just passing the money to you to pay, but it’s her money?

As regards the new tax law my CPA told me that there is a $500 exemption for an adult family member living in the household.

File head of household if you are providing 1/2 the costs of home ownership. She doesn't even have to live there but if it is considered her main home you still can claim this exemption. It's nice to get a tax break. I usually put it right back into home repairs that are needed.

So you are her VA fiduciary? If so VA requires a yearly accounting of all money that passes to the fiduciary account and all bills paid. All money paid must be strictly for the care of the veteran or spouse. At least this is the requirement for my dad. Definitely check with a CPA.

This is tricky and you need a CPA. To declare 50% you have to show you paid more than 50% of her care. That means splitting a % ofthe cost you incur yearly. Heat, electric mortgage, food, etc. Now she has 20k coming in. Is her care over 40k so you are footing over 20k? If she files, she claims herself so you can't claim her.

You need the advice of a CPA and an Elder Law Attorney.

VA benefits are considered benefits not income, so yes claim her while you can. You must reside with her or 6 months of the year.

You should get a CPA because of the complex nature of the question, such as did she file her own tax returns in  2016, 2015, etc., what are her tax liabilities and so on?

It would be wise to at least find someone for next year's taxes, if not this year, because of the changes made (screw us, benefit them!) Those new tax laws do not impact THIS year's tax return. Filing with her as a dependent could be doable this year (or you can possibly file an amended return after the fact, due to right now you are running out of time and likely need assistance in doing what you ask!) My understanding is similar to others where you have to provide more than a certain %age of their "care" AND her taxes would have to be filed as a dependent (if she files taxes, which my understanding is everyone must, even if nothing is owed or returned. When my kids had jobs, they had to file, but were still considered dependents at that time. It reduces their return/increases their liability, but given how little income for them it did not make that much difference and allowed me to file as 'head of household' rather than single, giving me more tax money back.)

Alternative to a CPA or Elder Attorney (both might be expensive, but definitely STAY AWAY from places like H&R) is to look up Enrolled Agent. They are certified by the IRS and must maintain yearly training to stay up to snuff with tax laws.

I have always done my own taxes, and took over my mother's the year after my dad's death (dreaded HR did that one, and using it to figure out the next year I found they missed about $3500 of interest income! I'm sure the IRS found this and corrected it, but I have no access to that year's data to confirm - it is long enough ago I don't worry about it.) I had to have her first change the W4 to 0 from 3 as that first year I did the taxes she owed over 6k (plus penalty)! Next was to increase the withholding even more to cover that tax due. When next tax time came, I kept asking if she got her tax paperwork so I could see how well I did in the adjustments. Mid-late March she announces that no one was taking care of this (huh???) so she went to H&R and is getting 5k back! I picked up her paperwork that night and went over everything, first on paper, then through turbo-tax (I still use paper myself, I just wanted some confirmation for my calculations) and both showed that I did it right! So I set up appointment to have them undo the mess they made. On arrival we were told no one had an appointment that day (even more reason to say these people are NOT working to help you!) but took us anyway as there was no one else there. I was treated kind of like an idiot until she hit the pension 1099 from my dad. Oh MY! Yeah, ya think lady? The yearly income for that WAY exceeds her SS income. So back goes the 5k, plus ANOTHER penalty. Also, while "fixing" their giant boo-boo, she tells me that I can get a job there... Um, no I am not an accountant. Oh, you don't have to be! Sure, just a warm body to sit in the chair and do what my mother always called BOOP BOOP BOOP and it is done! Yeah mom, they missed a couple of BOOPs there... I didn't say anything, but my thoughts were: 1) No way would I want to work for you and 2) No way would I want ANYONE to know I work for you! The way I see it is they just do the entry into a turbo-tax like system of their own. They are merely glorified typists/data entry people, and don't REALLY understand tax law at all!!!

Anyway, I found a local Enrolled Agent for doing the taxes for the trust we set up (plan was at least first year, but after seeing all that goes into it, no way Jose am I dealing with that!) The trust taxes went back to him again this year, and I also had him do my mother's this year for two reasons: 1) she now gets distributions (via her CU account which I manage) from the trust to help cover the cost of MC and 2) the cost of MC IS still deductible. Bottom line there is that ALL of her withholding came back. Now I have to adjust her W4 so that the money comes to her account instead of an interest free IRS holding place!

Again, look for local Enrolled Agent (you can look up what they are online - that's how I found them.) The charge for doing her tax return was comparable (actually slightly LESS AND he gives a 10% discount if paid within 10 days - I pay on the spot) to that nasty place, but you KNOW this guy is competent knows what he is doing. I am fairly certain a CPA would charge a lot more (but don't know that for fact) and any attorney will charge much more, but although they may know a lot, I'm sure they are not up-to-date on all IRS tax issues, where an ER would be (required by IRS.)