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Question from a website visitor:

I have a 24-year-old disabled daughter.  She lives in our home.  She is on our health insurance.  She cannot work.  We have a court date for her disability in a two months.

She receives food stamps.  She currently has our insurance as first insurer and Medicaid as a secondary.

Last year, we claimed her as a dependent because we provided more than half of her support and she is disabled according to her doctor.

Can we claim her as a dependent this year when she is getting Medicaid on the Affordable Care Act and food stamps?  

Answer

Your daughter is likely your dependent. The key test is: is she providing more than ½ of her own support?

Without bogging you down with confusing tax laws, there are 2 ways to claim someone as a dependent. One is “qualifying child” and one is “qualifying relative.” Normally once someone reaches age 24 they are no longer your qualifying child, and you have to look at the stricter “qualifying relative” standards. But if your child is totally and permanently disabled, you can claim them as a dependent regardless of their age and regardless of how much income they have, as long as THEY are not providing more than ½ of their own support.

You can find more information, including a worksheet for determining support, in IRS Publication 501.

If she is paying any Medicaid premiums herself, that would count as support that she provides herself. The food stamps would count as support provided by the state. Any ACA insurance premiums she pays would again count as support. Also if she has her own funds and uses those to buy food, clothing, etc, that would count as support she provided herself.

I assume she lives with you, so you are providing all of the support with her housing (the amount you count for support depends on the rental value of your house), plus any food you pay for yourself, as well as any medical bills you pay on your daughter’s behalf, clothes you buy for her, etc. Publication 501 can help with figuring out how to allocate these costs.

“This blog post, along with comments that may follow, should not be considered tax advice. Before you make final tax or financial decisions, please secure a professional tax advisor to give you advice about your unique situation. To secure Jason as your accountant, please click on the ‘Services’ link at the top of the page.”