Q. Does this situation (I'm a dependent for 2019 and 2021, but not 2020) ever happen as I have had a hard time finding it, I am just chalking it up to the pandemic.
A. Yes. It's very rare. But, the circumstances you describe would account for it.
There are two types of dependents, "Qualifying Children"(QC) and standard ("Qualifying Relative" in IRS parlance even though they don't have to actually be related). A person can still be a Qualifying relative dependent, if not a Qualifying Child, if he meets the 6 tests for claiming a dependent:
- Closely Related OR live with the taxpayer ALL year
- His/her gross taxable income for the year must be less than $4300 (2020).
- The taxpayer must have provided more than 1/2 his support
- He must be a US citizen or resident of the US, Canada or Mexico
- He must not file a joint return with his spouse or be claiming a dependent of his own
- He must not be the qualifying child of another taxpayer
Nontaxable Social security (including SSDI) doesn't count as income, for the income test, but social security money he/she spends on her self does count as support not provided by the taxpayer, for the support test. Money she puts into savings & investment does not count as support she spent on herself. Note that a parent is closely related so there is no requirement that she live with you at any time, during the year. But if you provided a home it helps your support case, unless they own the home you live in.
The IRS has a worksheet that can be used to help with the support calculation. See: http://apps.irs.gov/app/vita/content/globalmedia/teacher/worksheet_for_determining_support_4012.pdf The support value of a home is the fair market rental value, divided by the number of occupants.
