catax Posted February 12, 2008 Report Share Posted February 12, 2008 My client provides care for their dependent parent in her and her husbands own home. Her mother lived with them all year. Daughter received a W2 for in home care from the state of CA for providing care for her mother. The W2 is from her mother (Payer) to her daughter. Daughter meets the support test and provides over half of her parents support when this in-home-support is not considered. Question: Would this in-home-support payment be considered as additional support the mother provided on behalf of herself. She is the payer. Or addiional income from an outside agency? It is earned income on behalf of the daughter. Any thoughts? Thanks, Nena Quote Link to comment Share on other sites More sharing options...
jainen Posted February 12, 2008 Report Share Posted February 12, 2008 >>additional income from an outside agency<< Under qualifying relative rules, it doesn't make any difference whether the support is provided by the mother herself or another party. All the matters is whether the daughter provided more than half. The checks count against that, as does the mother's Social Security and any other non-taxable resources that are used. Remember you use the prorated rental value of the lodging, even though she owns the house. Quote Link to comment Share on other sites More sharing options...
catax Posted February 12, 2008 Author Report Share Posted February 12, 2008 The checks are also earned income on behalf of the daughter. So the are included in the amount that the mother or others provides towards her own support. But are they also could be included in the amount that the daughter provides towards her mothers support? Anyway kinda confusing. But she can't take the exemption if that is included in the amounts provided by mother or others. Thanks, Nena Quote Link to comment Share on other sites More sharing options...
jainen Posted February 12, 2008 Report Share Posted February 12, 2008 >>they also could be included in the amount that the daughter provides towards her mothers support?<< Come on, you know that's not right. She GOT the money, not paid it. Quote Link to comment Share on other sites More sharing options...
catax Posted February 13, 2008 Author Report Share Posted February 13, 2008 >>they also could be included in the amount that the daughter provides towards her mothers support?<< Come on, you know that's not right. She GOT the money, not paid it. Boy Janien you rally jump all over people. I just didn't write it clearly. You are probably a great writer and you have great input. Sometimes its hard to put what you mean to say in writing. What I meant is it could be included in the Daughters total income and used toward the mothers support. Not that the total amount would be included in support for the mother. Hopefully, I said what I was trying to say correctly this time. Quote Link to comment Share on other sites More sharing options...
Cathy Posted February 13, 2008 Report Share Posted February 13, 2008 My client provides care for their dependent parent in her and her husbands own home. Her mother lived with them all year. Daughter received a W2 for in home care from the state of CA for providing care for her mother. The W2 is from her mother (Payer) to her daughter. Daughter meets the support test and provides over half of her parents support when this in-home-support is not considered. Question: Would this in-home-support payment be considered as additional support the mother provided on behalf of herself. She is the payer. Or addiional income from an outside agency? It is earned income on behalf of the daughter. Any thoughts? Thanks, Nena catax, There is a worksheet on page 18 of Publication 501 that you can use to help you determine if the client provided more than 50% of her mother's support. The scenerio is definitely confusing as the mother's in-home-support payments are taxable to the daughter....but the worksheet will definitely help you determine the correct outcome. Quote Link to comment Share on other sites More sharing options...
MN2V Posted February 13, 2008 Report Share Posted February 13, 2008 I have a similar situation in MN. I definitely take the parent as a dependent. They are just trying to get around some things. And they charge to do the paperwork of the parent paying the daughter, when they should actually just pay the daughter. We have determined most of it goes for medical supplies and little is left as true income. Quote Link to comment Share on other sites More sharing options...
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