Can I Take a Dependency Exemption on My Taxes for Mom?

You support your kids financially and get a break on your taxes. If you support your mom, shouldn’t you get a break, too?

You very well may qualify for a tax break even if your parents don’t live with you. Here’s how to decide if you can take a dependency exemption for your mom (or dad).

Dependency Exemption Rules

First, for you to take an exemption, your mom must have less than $3,650 in taxable income (2010). Social Security benefits and other tax-free income don’t count, but interest, dividends and taxable pensions do.

Second, you must have provided over half her support. The definition of “support” you provide is quite broad. When you take her to the drug store, do you pay for her supplies with yours? If she lives with you, calculate her share of the food. Don’t forget gasoline and even a share of utilities and a fair market price for her room in your house.

If she doesn’t live with you, but you pay for someone else to take care of her or you pay for her to be in an assisted living facility, count those costs as support.

After you add up everything you spent on her personally, then calculate the total cost of her support, including amounts she spent from Social Security benefits and other income, plus anything your brothers and sisters chipped in. If the support you paid is more than half the grand total, you qualify.

How the Dependency Exemption Saves on Your Taxes

Taking a dependency exemption for Mom lowers your taxable income by $3,650 (in 2010). But that’s not all. If she qualifies as your dependent, you can deduct her medical expenses with those of the rest of your family. Medical expenses are deductible to the extent they exceed 7.5 percent of your income, but if you’re paying for long-term care insurance or other deductible medical expenses for your parent, you may reach that amount sooner than you think.

You may also qualify for the Child and Dependent Care Credit if you pay someone to take care of her while you work–just like you would if they were taking care of your kids.

You can take a dependency exemption for other people besides your biological mom whether they live with you or not as well, as long as they’re related to you. By IRS standards, that includes your father, step-parents, adoptive parents (but not foster parents), grandparents and even aunts and uncles.

For more details, talk to your tax professional or see IRS Publication 501.