Can You Claim Someone on SSI as a Dependent?
Learn how SSI affects dependent claims on tax returns, including criteria and necessary documentation for verification.
Determining whether you can claim someone receiving Supplemental Security Income (SSI) as a dependent on your tax return is crucial for maximizing potential tax benefits. SSI provides financial assistance to individuals with limited income and resources, often raising questions about their eligibility as dependents.
Dependent Criteria with SSI Involvement
To claim an individual receiving SSI as a dependent, you must meet the IRS’s specific criteria, including the relationship, residency, age, and support tests. The relationship test requires the individual to be a relative, such as a child, sibling, or parent, or a member of your household for the entire year. The residency test mandates that the dependent must have lived with you for more than half of the year. The age test generally applies to children under 19 or under 24 if they are full-time students, but it can be waived for those who are permanently and totally disabled. The support test requires you to provide more than half of the dependent’s total support for the year.
SSI benefits do not count as support provided by you. When calculating support, consider other sources of income and support, such as food, housing, and medical care, excluding SSI. This calculation can be complex, especially if the SSI recipient has other income or resources. Keeping detailed records of all support provided is essential to ensure compliance with IRS requirements.
Documents for Claim Verification
To substantiate your claim, meticulous documentation is necessary. Gather documents that establish the relationship, such as birth certificates, adoption papers, or marriage licenses. These prove the familial connection. Residency can be shown through utility bills, lease agreements, or official correspondence indicating the dependent’s residence with you for the requisite period. These documents should clearly reflect the dependent’s name and address.
The support test requires detailed financial records, including receipts, bank statements, and records of expenses like rent, groceries, and medical bills. Clearly outline the financial support you provided throughout the year, excluding SSI benefits, to demonstrate that you contributed more than half of the dependent’s overall support. Maintaining a comprehensive ledger or spreadsheet that categorizes and totals these expenses is helpful for easy reference during an audit.
Claiming on Tax Returns
Claiming a dependent who receives SSI on your tax return involves understanding the relevant tax codes and regulations. Use Form 1040 to list your dependents and claim potential tax benefits, such as the Child Tax Credit or the Credit for Other Dependents, which can significantly reduce your taxable income. The IRS’s Publication 501 provides guidance on the qualifications and documentation required for dependents.
The Tax Cuts and Jobs Act (TCJA) of 2017 introduced changes still applicable today. While the personal exemption was suspended, the standard deduction was increased, and the Child Tax Credit was expanded. This expansion provides a credit of up to $2,000 per qualifying child, with up to $1,400 being refundable. The Credit for Other Dependents offers up to $500 for each qualifying dependent who is not a qualifying child. These credits can reduce your overall tax liability, making it essential to accurately claim eligible dependents.