30 Jan My adult son receives SSI. Should he be a dependent on my tax return?

Q. We have an adult son living with us. He is receiving SSI benefits. Should we include or exclude him as dependent in our income tax return? What are pros and cons?
— Dad

A. Let’s first go over the criteria to claim someone as a dependent.

The IRS sets the requirements.

It says the person must be age 18 or under unless they are a full-time student, in which case, they may be claimed up to age 24, said Steven Gallo, a certified public accountant and personal financial specialist with U.S. Financial Services in Fairfield. The age requirement however is waived if the person in question is deemed to be disabled, he said.

The person in question must be a relative, however, the IRS has a relatively liberal view on this including stepchildren and foster children, Gallo said.

Also, you must be able to prove that you have provided at least 51% of the person’s support for the year in question, the person cannot be claimed as a dependent by anyone else nor can they file a joint tax return, and the person must share the same residence for at least half of the year, Gallo said.

Based on your question, it seems you meet at least some of the requirements, so you have to determine whether you have provided at least 51% of the person’s support, Gallo said.

“In calculating the answer to this requirement, you must factor in the SSI benefits your son is receiving,” Gallo said. “For example, if you determine the annual cost for your son’s lifestyle is $30,000 and he currently receives $18,000 a year in SSI benefits, you would not meet the requirement of providing at least 51% of the cost of his lifestyle and would therefore not be eligible to claim his as a dependent.”

Now to the pros and cons.

If you and your spouse’s combined income is below $400,000 you may qualify for the child tax credit in an amount of up to $2,000, Gallo said.

Based on your income you may also qualify for the earned income credit, however the income levels for this credit are substantially lower, he said.

“If you and your spouse both work and you incur any costs for care of your son while you are at work you may also qualify for a dependent care credit for costs paid to a qualifying provider of your son’s care,” Gallo said.

All these credits can substantially lower your tax liability.

To the cons.

If your son has any taxable income which requires him to file his own tax return, the fact that you are claiming him as a dependent could create a larger tax liability for him, Gallo said.

“Based on the severity of your son’s disability, you claiming your son as a dependent may significantly decrease the amount of public assistance he may be eligible for now and in the future,” he said. “This may impact not only his SSI benefits but other programs that may be available to him.”

There are many factors for you consider, so think about meeting with a tax professional, and maybe a disability attorney, so someone can help you decide based on all the specifics of your situation.

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This story was originally published on Jan. 30, 2023.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.