When several relatives cover expenses

Submitted on Wednesday April 3rd, 2013

Are you helping support a loved one? Perhaps you and several family members are each giving a little bit. Don't overlook a potential tax benefit. One of you may be able to claim the elder as a dependent.

First, your loved one must meet IRS guidelines to qualify as a dependent:

  • Income. In 2012, his or her taxable income must have been less than $3800 for the year. This includes pension benefits, interest, and dividends from investments. Also, withdrawals from retirement savings plans. Social Security benefits are typically not counted.
  • Relationship. Immediate family members can be dependents, such as a parent or sibling. Another family relative may also be a dependent. For instance, an in-law or stepparent will qualify. Even nonrelatives can be a dependent if they lived with you all year.

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