For the tax year 2017 and earlier, it was possible for you to claim your parent as a dependent on your income taxes. However, the passage of the 2017 Tax Cuts and Job Acts changed that. You are no longer able to take personal and dependent deductions. The professionals at Elder Care Direction can help you to understand how the law has changed your ability to claim your parents and some options that you might have.
Elimination of personal and dependent deductions
The 2017 Tax Cuts and Job Act eliminated deductions for you and your dependents. Beginning in 2019, you will be unable to claim your parent as your dependent. Instead, you may be allowed to take a $500 tax credit for your parents who are your dependents.
The standard deduction has been almost doubled for the tax years from 2018 to 2025, meaning that you might take the following standard deductions:
- $12,000 if you are single
- $24,000 if you are married and filing a joint return
- $18,000 if you are filing as a head of household
Establishment of the $500 credit
The Tax Cuts and Job Act established a new $500 credit for non-child dependents, including your dependent parents for whom you provide care. Your parents will qualify you to claim the credit only if they do not have any gross income during the year. This is because the tax laws state that the gross income of the dependents must not exceed the dependent exemption amount. Since the dependent exemption has been eliminated, it is now equal to zero.
Get help from Elder Care Direction
The elimination of the dependent exemptions from your taxes means that you will no longer be able to claim your parents as dependents on your taxes. However, if you take the standard deduction, the elimination of the dependent exemption may not be too harmful to you. If your parent does not have an income in 2018, you might be able to claim the new $500 credit for him or her. To learn more, contact Elder Care Direction online or by telephone to schedule an appointment.