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Anne
Anne, Master Tax Preparer
Category: Tax
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Experience:  Enrolled Agent with 25 Years Experience specializing Individual and Small Businesses
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This question concerns my wifes daughter. She is 30 trs. old,

Customer Question

This question concerns my wifes daughter. She is 30 trs. old, single and unemployed. She suffers from several mental conditions which keeps her from not only getting a job but keeps her from leaving the saftey of the house. We have been taking care of her in our home for the past 2 years. Is there any way for us to claim her as a dependant? If this were possible my insurance would cover her and we could get the proper help for her that she so desperatly needs. Thank you in advance for any guidance you can provide.

Tom Meyer
Submitted: 2 years ago.
Category: Tax
Expert:  CGCPA replied 2 years ago.

Welcome to Just Answer. I am here to help you resolve your tax and finance concerns. Please feel free to ask anytime you need extra help.

If she has a doctors diagnosis stating that she suffers from a mental condition which disables her ability to function, she does qualify as your dependent, not as a daughter but as a qualifying person. The next step is to be sure you are providing more than 1/2 her support and get the written diagnosis. You will be able to receive tax benefits and get her the insurance coverage she needs. Here is some information from the IRS about this. It contains one or more links to other pages which you may find useful. As an additional point, you may be able to also get her financial assistance so she can start an internet business and work from home. Check with local Social Service agencies on that.










Six Important Facts about Dependents and Exemptions






IRS Tax Tip 2011-07 January 11, 2011

Some tax rules affect every person who may have to file a federal
income tax return - these rules include dependents and exemptions. Here are six
important facts the IRS wants you to know about dependents and exemptions that
will help you file your 2010 tax return.




  1. Exemptions reduce your taxable income. There
    are two types of exemptions: personal exemptions and exemptions for dependents.
    For each exemption you can deduct $3,650 on your 2010 tax return.


  2. Your spouse is never considered your dependent. On a joint
    return, you may claim one exemption for yourself and one for your spouse. If
    you're filing a separate return, you may claim the exemption for your spouse
    only if they had no gross income, are not filing a joint return, and were not
    the dependent of another taxpayer.


  3. Exemptions for dependents. You generally can take an exemption for
    each of your dependents. A dependent is your qualifying child or qualifying
    relative. You must list the social security number of any dependent for whom you
    claim an exemption.


  4. If someone else claims you as a dependent, you may still be required to
    file your own tax return.
    Whether you must file a return depends on several
    factors including the amount of your unearned, earned or gross income, your
    marital status, any special taxes you owe and any advance Earned Income Tax
    Credit payments you received.


  5. If you are a dependent, you may not claim an exemption. If someone
    else - such as your parent - claims you as a dependent, you may not claim your
    personal exemption on your own tax return.


  6. Some people cannot be claimed as your dependent. Generally,
    you may not claim a married person as a dependent if they file a joint return
    with their spouse. Also, to claim someone as a dependent, that person must be a
    U.S. citizen, U.S. resident alien, U.S. national or resident of Canada or Mexico
    for some part of the year. There is an exception to this rule for certain
    adopted children. See IRS Publication 501, Exemptions, Standard Deduction,
    and Filing Information
    for additional tests to determine who can be claimed
    as a dependent.


For more information on exemptions, dependents and whether you or your
dependent needs to file a tax return, see IRS Publication 501. The
publication is available at http://www.irs.gov or can be ordered by calling
800-TAX-FORM(NNN) NNN-NNNN. You can also use the Interactive Tax
Assistant
at http://www.irs.gov to determine who you can claim as a
dependent and how much you can deduct for each exemption you claim. The ITA tool
is a tax law resource on the IRS website that takes you through a series of
questions and provides you with responses to tax law questions.


Links:


IRS Publication 501, Exemptions, Standard
Deduction, and Filing Information

Expert:  Anne replied 2 years ago.
Hi


Different expert here. If your child is deemed "totally and permantely disabled", then you may claim her as a Qualifying Child for tax purpose regardless of her age since she is still living at home with your. Please see below::
Child, Permanently and totally disabled.

This is a fine distinction I know, but it can make a huge difference on your taxes. In most cases the IRS requires that the state recoginize

 

The above expert was correct in that you need some sort of proof that your daughter is disabled, and in many cases that means that your child is collecting Social Security Disability, although as the expert mentioned above, a doctor's note stating that your daughter is disabled is also sufficient.

 

Since you may claim your daughter under the Qualifying Child rules, this means that you may possibly claim the Earned Income Credit if your Adjusted Gross Income meets the requirements. Please see below:

 

Tax Topics - Topic 601 Earned Income Credit

 

Also, you mentioned that due to your daughter's condition, she may not leave the house. As your qualifying child, you may claim The Child Care expenses you pay out pocket for any one who comes in to stay with your daughter while you can't . Please see page 1 from below:

 

2011 Instruction 2441

 

One last item. The rules re: support for qualifying children changed a little while back. While it used to be that you had to provide at least 51% of their support in order to claim them, now you may claim your child as along as the CHILD does not provide more than 51% of their own support. Please see below:

 

Support Test (To Be a Qualifying Child)

 

I hope this helps.

 

 

Anne, Master Tax Preparer
Category: Tax
Satisfied Customers: 1638
Experience: Enrolled Agent with 25 Years Experience specializing Individual and Small Businesses
Anne and 2 other Tax Specialists are ready to help you
Customer: replied 2 years ago.

Anne and Charles,

Thank you so much for your answers. When you stated that we would need a Doctors diagnosis, does that mean a Psychiatrist, Psychologist or her family Doctor. Also in order to get her onto my employers health insurance will this diagnosis/letter from the professional be sufficient for the insurance company to add her on my plan as a dependant? Is there any instance that we would need to get a court to rule her as our dependant? Thank You.

Expert:  CGCPA replied 2 years ago.
The diagnosis should be from a licensed MD, thus a psychiatrist or family doctor will suffice with the psychiatrist being preferred. A copy of the diagnosis letter should suffice for the insurance company although they may require more (from the doctor). The key is the designation MD. A psychologist does not necessarily have that designation while the other two do. A court ruling will also suffice but it still require a diagnosis before a court will act. Their ruling will be in the form of a custody order.
Expert:  CGCPA replied 2 years ago.
Once that is all in place, you should start to look for work she can do from home. A small internet business for example. It will enable her to enhance her social skills and perhaps even make some money. Both will help her confidence and self esteem.

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