Dependent Parent tax returns?

[chennaikar]

Hi All,

I sponsored my widowed father's GC and it has been approved.
He was living in self sufficient in India on his pension and savings. However his health has faltered and he cannot live by himself any more.
I got him over to live with me last year. He has been living with me the whole of last year and I cover his lodging, boarding, medical and immigration expenses. He has significant medical expenses, luckily I have been able to buy health insurance on the exchange.
My question is, how should I file his tax returns? Should I claim him as a dependent on mine? Or should he file his own? Would any of these impact the health insurance?
Has anyone faced a similar situation?

Thanks in advance

[SG2020]

Hi All,

I sponsored my widowed father's GC and it has been approved.
He was living in self sufficient in India on his pension and savings. However his health has faltered and he cannot live by himself any more.
I got him over to live with me last year. He has been living with me the whole of last year and I cover his lodging, boarding, medical and immigration expenses. He has significant medical expenses, luckily I have been able to buy health insurance on the exchange.
My question is, how should I file his tax returns? Should I claim him as a dependent on mine? Or should he file his own? Would any of these impact the health insurance?
Has anyone faced a similar situation?

Thanks in advance

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While I am sorry as I cannot guide you on the Tax Return , I shall appreciate if you could let me know about your father's healt insurance . 1) which insurance company , 2) what type of insurance , 3) yearly premium , 4) deductibles , 5) Is he a Green Card holder ? , 6) Is he elligible for ObamaCare or similar options ? Thanks

[newacct]

Hi All,
My question is, how should I file his tax returns? Should I claim him as a dependent on mine? Or should he file his own? Would any of these impact the health insurance?
Has anyone faced a similar situation?
Thanks in advance

The two are not mutually exclusive. Someone who can be claimed as a dependent can always file their own tax return, but they would have to check a box on their tax return that says someone can claim them as a dependent.

Whether your father was your dependent depends on the facts. If his 2020 income was under $4300 and you provided more than half his support in 2020, you can claim him as your dependent. But even if you choose to not actually claim him as your dependent, as long as the conditions for claiming him to be your dependent are met, he must check the box on his tax return (if he files a tax return) that says someone can claim him as a dependent, and he would not be eligible for certain tax credits, including the stimulus payments.

If you claim him as your dependent (assuming that you meet the conditions to claim him), you can get a $500 tax credit for dependents, and you will later this year receive a $1,400 amount for a dependent for your third stimulus payment.

If you do not meet the conditions to claim him as a dependent, he can file a tax return and not check the box saying someone can claim him as a dependent, and he can claim the first two stimulus payments ($1,800) as tax credits on his 2020 tax return, and he will also receive the third stimulus payment ($1,400) in the future.

[SG2020]

The two are not mutually exclusive. Someone who can be claimed as a dependent can always file their own tax return, but they would have to check a box on their tax return that says someone can claim them as a dependent.

Whether your father was your dependent depends on the facts. If his 2020 income was under $4300 and you provided more than half his support in 2020, you can claim him as your dependent. But even if you choose to not actually claim him as your dependent, as long as the conditions for claiming him to be your dependent are met, he must check the box on his tax return (if he files a tax return) that says someone can claim him as a dependent, and he would not be eligible for certain tax credits, including the stimulus payments.

If you claim him as your dependent (assuming that you meet the conditions to claim him), you can get a $500 tax credit for dependents, and you will later this year receive a $1,400 amount for a dependent for your third stimulus payment.

If you do not meet the conditions to claim him as a dependent, he can file a tax return and not check the box saying someone can claim him as a dependent, and he can claim the first two stimulus payments ($1,800) as tax credits on his 2020 tax return, and he will also receive the third stimulus payment ($1,400) in the future.

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Thanks for your quick response . In my case parents' (GC Holder) income is NIL , as they have no pension/income and hence they can be considered as fully dependent on US citizen son . They will have to file ZERO tax return . Considering this fact , can you please advise Tax Return formalities and also best option of Health Insurance policy with minimum annual premium in California State . Thanks .

[newacct]

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Thanks for your quick response . In my case parents' (GC Holder) income is NIL , as they have no pension/income and hence they can be considered as fully dependent on US citizen son . They will have to file ZERO tax return . Considering this fact , can you please advise Tax Return formalities

In that case, you should claim him as your dependent on your tax return. You should get a $500 tax credit for claiming him as your dependent. (If you are unmarried or living apart from your spouse, you might also be able to change to Head of Household filing status which has better tax rates.) You will not get any additional stimulus amount for claiming him as dependent for the first or second stimulus payments, since he is over 16; however, you will get an additional $1,400 for every dependent for the third stimulus payment, even if he is over 16. If you file your 2020 tax return claiming him as dependent, you should get the third stimulus payment for him as a plus-up payment later in 2021. If not, you can claim it as a tax credit on your 2021 tax return.

[SG2020]

In that case, you should claim him as your dependent on your tax return. You should get a $500 tax credit for claiming him as your dependent. (If you are unmarried or living apart from your spouse, you might also be able to change to Head of Household filing status which has better tax rates.) You will not get any additional stimulus amount for claiming him as dependent for the first or second stimulus payments, since he is over 16; however, you will get an additional $1,400 for every dependent for the third stimulus payment, even if he is over 16. If you file your 2020 tax return claiming him as dependent, you should get the third stimulus payment for him as a plus-up payment later in 2021. If not, you can claim it as a tax credit on your 2021 tax return.

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The US Citizen son ( 45 yrs Age) is already filing Tax return as MFJ with his wife . Parents' living expenses will be fully born by US Citizen son . Please suggest best option of Health Insurance policy for Parents with minimum annual premium in California State . Thanks .

[SG2020]

In that case, you should claim him as your dependent on your tax return. You should get a $500 tax credit for claiming him as your dependent. (If you are unmarried or living apart from your spouse, you might also be able to change to Head of Household filing status which has better tax rates.) You will not get any additional stimulus amount for claiming him as dependent for the first or second stimulus payments, since he is over 16; however, you will get an additional $1,400 for every dependent for the third stimulus payment, even if he is over 16. If you file your 2020 tax return claiming him as dependent, you should get the third stimulus payment for him as a plus-up payment later in 2021. If not, you can claim it as a tax credit on your 2021 tax return.

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Shall appreciate your response .
The US Citizen son ( 45 yrs Age) is already filing Tax return as MFJ with his wife . Parents' living expenses will be fully born by US Citizen son . Please suggest best option of Health Insurance policy for Parents with minimum annual premium in California State . Thanks .

[angelica]

If you claim your father as a dependent on your taxes, your income will be counted in his household income in determining eligibility for Medi-Cal (California's Medicaid) and Covered California (California's Obamacare marketplace). So in that case he would likely not be eligible for Medi-Cal; he can buy a plan from Covered California, but he may not qualify for a subsidy if your income is high. If you do not claim him as a dependent on your taxes, your income will not be counted in his household income, and he can get Medi-Cal, which is free, but in theory, the state could sue the I-864 sponsor (you) for reimbursement.

[SG2020]

If you claim your father as a dependent on your taxes, your income will be counted in his household income in determining eligibility for Medi-Cal (California's Medicaid) and Covered California (California's Obamacare marketplace). So in that case he would likely not be eligible for Medi-Cal; he can buy a plan from Covered California, but he may not qualify for a subsidy if your income is high. If you do not claim him as a dependent on your taxes, your income will not be counted in his household income, and he can get Medi-Cal, which is free, but in theory, the state could sue the I-864 sponsor (you) for reimbursement.

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Thanks for your quick response . Can parent (a Green Card holder) declare that he is not dependent on his US citizen son and file Zero Income tax return independently ? Will this enable him to claim Medi-Cal which is free ? What will be the implications , advantages/dis-advantages ? Thanks .

[angelica]

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Thanks for your quick response . Can parent (a Green Card holder) declare that he is not dependent on his US citizen son and file Zero Income tax return independently ? Will this enable him to claim Medi-Cal which is free ? What will be the implications , advantages/dis-advantages ? Thanks .

It is not necessary for him to file a tax return. From what I understand, as long as the father isn't claimed as a dependent, even if he is actually a dependent, the son's income will not be counted in the father's household for Medi-Cal purposes. (And whether he can be claimed as a dependent is based on the facts and not something they can make up anyway. If he can be claimed as a dependent he must check the box saying so if he files a tax return.)