SAVE Plan and Dependent

[Tax1219]

If I show my parents as dependent(As I pay 50% of there bills and there income is not much) while submitting SAVE Plan form can I show them dependent while filling Tax Return and also file there separate tax return as they do earning some income.    

[KimberW]

The rules for claiming parents as dependents on your tax return and whether they can be included in your "family" for determining Family Size when you apply for an Income Driven Repayment plan are different. For the rules about the student loan repayment, please refer to this page: How is ‘family size’ defined for income-driven repayment (IDR) plans? 

For tax purposes, you can claim a parent as a dependent -- even if they don't live with you -- as long as they meet the other requirements. I've included a brief list here, but there is a more detailed article here: Can I Claim My Parent as a Dependent? 

• Your parent's gross income must be less than $4,700 for the year
• You must pay for at least half of your parent's support throughout the year (see the article for a list of what kinds of expenses are considered as support)
• Your parent can't be claimed as a child by another taxpayer
• Your parent must be a US citizen, US national, US resident alien, or a resident of Canada or Mexico
• You can't be a dependent of another taxpayer
• Married parents can't file a joint return unless they are only filing to receive a refund

Based on those requirements, you can decide whether to claim your parents as dependents or not. But, if they don't live with you, then they won't be included in your family size for the SAVE application.

Thank you for participating in this event!

-- KimberW