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Chapter 6. Income Taxes > Parents and Children

Parents and Children

Just as parents are able to claim their minor children as dependents on the parents’ income tax return, turnabout is fair play; adult children who may now be paying the medical bills or other living expenses of their parents can, in some circumstances, take their parents as dependents for income tax purposes. Being able to deduct a parent’s or grandparent’s medical bills or nursing home costs can be a great advantage to younger family members in a high income tax bracket. In addition, the bill-paying younger family member will get the advantage of an additional dependency exemption.

To qualify as a dependent in these circumstances, you must rely on your child to pay for more than half of your living expenses. In addition, your taxable gross income must be less than the $3,000 personal exemption amount. Tax-exempt amounts of income from Social Security retirement benefits as well as other tax-exempt income, such as tax-free municipal bond income, are not counted in determining your gross income for this purpose.


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