Christian Posted March 5, 2020 Report Share Posted March 5, 2020 A new client came in bringing his return from his retiring former taxman. He is just over 80 yoa and has a daughter in her early 50's who draws Social Security disability who lives with him all year. On reading his 2018 return his daughter is indicated as not being his dependent but qualifies him for the HOH filing status. No one else claims her as a dependent and she files no tax returns. My reading of the HOH status indicates he must carry her as a dependent. Of course, this will mean removing her from his return and showing him as a single filer. Am I missing something here ? Quote Link to comment Share on other sites More sharing options...
Lee B Posted March 5, 2020 Report Share Posted March 5, 2020 I would do a more in depth look at whether she can be claimed a a dependent. 1. Disability Income is not considered to be wages. 2. You need to look at where the disability income went, for example if a chunk of it went into savings, that doesn't count as support. Quote Link to comment Share on other sites More sharing options...
Christian Posted March 5, 2020 Author Report Share Posted March 5, 2020 I am certain he pays over half her support. My question involves not carrying her as a dependent and whether it can be done. Doing so as a dependent will interfere with her medicare benefits which I suppose is why the former preparer showed her as not a dependent. Even so I can see no way of leaving her on the return unless he would show her as his dependent as I suspect the former reporting is incorrect. Quote Link to comment Share on other sites More sharing options...
Pacun Posted March 6, 2020 Report Share Posted March 6, 2020 Why don't you look at her disability.... who knows maybe the mother claimed her last year and lived with the father. Quote Link to comment Share on other sites More sharing options...
Randall Posted March 6, 2020 Report Share Posted March 6, 2020 11 hours ago, Christian said: I am certain he pays over half her support. My question involves not carrying her as a dependent and whether it can be done. Doing so as a dependent will interfere with her medicare benefits which I suppose is why the former preparer showed her as not a dependent. Even so I can see no way of leaving her on the return unless he would show her as his dependent as I suspect the former reporting is incorrect. Does that stop her medicare benefits? Quote Link to comment Share on other sites More sharing options...
Yardley CPA Posted March 6, 2020 Report Share Posted March 6, 2020 13 hours ago, Christian said: I am certain he pays over half her support. My question involves not carrying her as a dependent and whether it can be done. Doing so as a dependent will interfere with her medicare benefits which I suppose is why the former preparer showed her as not a dependent. Even so I can see no way of leaving her on the return unless he would show her as his dependent as I suspect the former reporting is incorrect. How does being claimed as a dependent impact interfere at all with medicare benefits? If the father is paying more than half half of the daughters support, she lives with him, has no wages, and does not file a return, why wouldn't she be considered as a dependent (assuming she is not claimed by someone else)? As for your statement that he "must" carry her as a dependent, is that accurate? If he chooses not to file HOH or claim her, he has no obligation to do it...does he?? I'm not overly versed in HOH but I do believe he qualifies for it and I think he is eligible to claim her as a dependent as well. Quote Link to comment Share on other sites More sharing options...
Pacun Posted March 6, 2020 Report Share Posted March 6, 2020 1 hour ago, Yardley CPA said: How does being claimed as a dependent impact interfere at all with medicare benefits? Let's say that I have a daughter that lives with me in the Pacun tower. If I claim her as my dependent, medicare would request my taxes. If I don't list her as my dependent, they will not ask for anything and she would qualify for the benefits without any questions asked. It seems to be legal not to claim someone as a dependent and therefore the famous phrase on the rules that reads: "if a parent can claim the exemption and chooses not to do so, no one can claim the exemption for that child". In this case, parent chooses not to claim the exemption for the "child" and no one else is claiming it. Quote Link to comment Share on other sites More sharing options...
Randall Posted March 6, 2020 Report Share Posted March 6, 2020 I tend to agree with Yardley. Pacun, will they ask questions, but otherwise, wouldn't the dependent still qualify for the Medicare? Quote Link to comment Share on other sites More sharing options...
Pacun Posted March 6, 2020 Report Share Posted March 6, 2020 Again, you have to see what disability she has. Quote Link to comment Share on other sites More sharing options...
Christian Posted March 6, 2020 Author Report Share Posted March 6, 2020 I questioned the daughter who was the one who raised the medicare concern stating she files an annual form with them stating that no one claims her as a dependent. She advised me that doing so would negatively effect her drug benefits. Apparently the Service never looked into her being shown on the father's return as a non-dependent assuming I suppose he gave that status to her mother but retaining the HOH status for himself. Her mother has never claimed the dependent status for her. In truth it would likely go forward with no problems just as it is but with all the new paperwork (Form 8867) I don't feel it is a good idea to not strictly follow the law. Quote Link to comment Share on other sites More sharing options...
grandmabee Posted March 7, 2020 Report Share Posted March 7, 2020 We are talking about Medicaid not Medicare correct? Daughter is concerned her benefits will drop if someone is claiming her as a dependent. Quote Link to comment Share on other sites More sharing options...
Randall Posted March 7, 2020 Report Share Posted March 7, 2020 2 hours ago, grandmabee said: We are talking about Medicaid not Medicare correct? Daughter is concerned her benefits will drop if someone is claiming her as a dependent. I thought people on SocSec disability got medicare. I've seen SSA-1099s with medicare premiums deducted. 1 Quote Link to comment Share on other sites More sharing options...
Christian Posted March 7, 2020 Author Report Share Posted March 7, 2020 The daughter's concern is that being shown on her dad's return as his dependent would cause problems with her drug benefits through Medicare. Unless I am completely mistaken he HAS to have a dependent to use the HOH status. Under his previous filings he did not indicate she was his dependent and I suppose the Service never cross checked it so no problem arose. I am simply going to delete her from his filings going foreward. Quote Link to comment Share on other sites More sharing options...
Randall Posted March 8, 2020 Report Share Posted March 8, 2020 I don't know how we're supposed to know what criteria is used by Medicare people. And if a client talks with them, they may have a completely different connotation to the term 'dependent' than in the tax return terminology. Does anyone have a reference or good source to all this? Quote Link to comment Share on other sites More sharing options...
Yardley CPA Posted March 8, 2020 Report Share Posted March 8, 2020 14 hours ago, Christian said: Unless I am completely mistaken he HAS to have a dependent to use the HOH status. What about situations where divorced parents split the dependency by year? I was under the impression the parent that the child lived with during the year could still claim HOH but not claim the child as the dependent that year since the other parent was. Maybe we're referring to the same thing but just saying it differently and you actually mean qualifying person instead of dependent? 1 Quote Link to comment Share on other sites More sharing options...
Christian Posted March 15, 2020 Author Report Share Posted March 15, 2020 In point of fact I finally determined that the former practitioner in reading this used this method even though there was no other parent to claim the daughter. Another incidence in which the IRS instructions can lead a person astray unless combed over again and again. Quote Link to comment Share on other sites More sharing options...
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