Claiming mother & Father

[Trnr395]

Have client who owns a house and his mother and father are living with him. They only have social security income and do not file a tax return. He can claim them for tax purposes right as two dependants and file head of household?

Thanks

[RoyDaleOne]

(e)Special Rule for Parents

A taxpayer can qualify as a head of household if he maintains a household that constitutes the principal place of abode for his father or mother or both. [13] The requirement that the taxpayer must be single does not change under this rule, but in this case, the taxpayer is not required to reside in that household. Reg. Section 1.2-2©(2).

The household must be the parent's principal place of abode for the entire taxable year (rather than the generally applicable one-half-year requirement), and the taxpayer must be entitled to claim the dependency deduction with respect to the parent. A parent is considered as occupying the household for the entire year, notwithstanding temporary absences from the household due to special circumstances, such as illness or vacations. In addition, the fact that the parent dies within the taxable year will not prevent the taxpayer from qualifying as head of household, if the household constituted the principal place of abode for the parent for the preceding part of the taxable year. Reg. Section 1.2-2©(2).

Note: Must meet support test...

See Pub. 2187. Tax Item: Support Test and Worksheet.

In computing the total support of an individual and the amount contributed by any person toward that support, the fact that support payments are made from tax-exempt income or from capital or other sources is immaterial. [52] Tax-free support items include certain social security benefits, welfare benefits, medical insurance premiums or benefits, armed forces family allotments, non-taxable pensions, tax-exempt interest, and borrowed amounts. [53]

Income test...

Tax-exempt income, such as certain social security benefits, is not

included in gross income.

[kcjenkins]

So the one thing I would add is that it is wisest to do the support worksheet on each parent, and keep that in your file. If they meet the support test, you are good to go. In fact, you are good to go for HOH if even one of them meets the support test. Knowing this, with two parents it's often easy to plan things so that at least one of them meets the support test.