How much can a dependent make in 2018?

[lianying1103]

In 2017, a dependent can make up to $4,050, the amount for personal exemption. But with the repeal of personal exemption in 2018, does anyone know the income limit for an elderly parent?

[DawnC0]

In 2018, the personal exemption goes away, but there will be a taxable income limit of $4,150 (up from $4,050 in 2017) for qualifying relative dependents.  Although there is no personal exemption, there is an ''Other Dependent Credit'' of $500 available for 2018.

The limit applies to Qualifying Relatives; there is no limit for Qualifying Children, see below.  

Qualifying child

• They are related to you.
• They aren't claimed as a dependent by someone else.
• They are a U.S. citizen, resident alien, national, or a Canadian or Mexican resident.
• They aren’t filing a joint return with their spouse.
• They are under the age of 19 (or 24 for full-time students).
  • No age limit for permanently and totally disabled children.
• They live with you for more than half the year (exceptions apply).
• They didn't provide more than half of their own support for the year.

Qualifying relative

• They don't have to be related to you (despite the name).
• They aren't claimed as a dependent by someone else.
• They are a U.S. citizen, resident alien, national, or a Canadian or Mexican resident.
• They aren’t filing a joint return with their spouse.
• They lived with you the entire year.
• They made less than $4,150 in 2018.
• You provided more than half of their financial support.

If your parent and/or dependent earns over $12,000 in 2018, they will file their own return.

[Edited January 30, 2018] | 6:55 PST

[lianying1103]

Thanks Dawn! But are you sure there is no benefits in claiming an elderly parent as dependent in 2018? Did they take away the tax bracket for head of household? My tax are usually lower being a head of household for claiming my parent as dependent.

[DawnC0]

You are welcome, and you will still be able to claim Head of Household as long as you provide more than 50% of your parent's support; your parent will still be considered a 'qualifying dependent' in 2018.  So yes, there is the HOH benefit, just no 'exemption' benefit.  However, there is the Other Dependent Credit of $500 that is also available.

[lianying1103]

Excellent, thanks Dawn! Just wanted to make sure because in the past, I have to make sure to ask my elderly mother to take less than the personal exemption amount from her 401k so she can stay as a qualifying dependent to me.

[DawnC0]

You are welcome.  As long as you provide more than 50% of her financial support, you should be fine.  See the 'qualifying dependent' part of this article:  <a rel="nofollow" target="_blank" href="https://turbotax.intuit.com/tax-tips/family/guide-to-filing-taxes-as-head-of-household/L4Nx6DYu9">ht...>

[lianying1103]

Is that article for tax year 2017 or 2018? Because when I file with TurboTax for 2017, it asked me if my parents make more than $4,050. If I respond yes, then my parent is no longer qualified as my dependent, and I'm not qualified as HOH without a qualifying dependent.

[DawnC0]

That article is for 2017.  Does TurboTax still give you the Head of Household filing status?

[lianying1103]

No, it updated my HOH status to single. And alerted me that I'm not qualified as HOH, because my parent is not a dependent for the year. This is exactly reason I wanted to make sure for 2018 because my mother took out $4,200 in 2017, so I missed the tax break despite providing more than 50% support, very very unfortunate!

Anyway, that article did mentioned at the end that "if you paid for more than half of the living expenses for your parent's main home throughout the entire tax year and you are 'eligible to claim him as a dependent', then you may file as head of household."

[DawnC0]

In 2017, the amount to disqualify someone as a dependent is $4050; in 2018, it will be TAXABLE income over $4,150.  Sorry that you missed it for 2017..:(  The amount of income it will take to generate someone having to file their own tax return will be $12,000.

[ladylisa426]

Does the 12000 include social security income?

[moschou1]

My income for 2018 was under $6,500. Can my daughter claim me as a dependent on her 2018 income taxes?

[re2boys]

@moschou1  Please ask a new question, tacking onto a year old thread becomes very confusing and you may get an inaccurate answer.

[moschou1]

It seemed straightforward enough & on topic, but sure I can do that.