Hal_Al
Level 15

Deductions & credits

Q. Would I be able to claim her as an other dependent (not for child tax credit)?

A.  Yes, most likely,  because you apparently provide more than half her support.  You may have to do the support calculation.  Who provides the home she lives in may be critical.  

SSI doesn't count as income, for the income test, but social security and SSI money she spends on her self does count as support not provided by you, 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. If no one person (or married couple) provides 50% of the support (for example her siblings are also sending support), then a "multiple support agreement” (IRS Form 2120) can be used, to allow you to claim the dependent. https://www.irs.gov/pub/irs-pdf/f2120.pdf

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.

 

Q. Also would that qualify me for earned income tax credit?

A.  No, because she only qualifies as an Other dependent, not a qualifying Child. 

 

There are two types of dependents, "Qualifying Children"(QC) and Other ("Qualifying Relative" in IRS parlance even though they don't have to actually be related). There is no income limit for a QC but there is an age limit (or disability status), student status, a relationship test and residence test. Only a QC qualifies a taxpayer for the Earned Income Credit and the Child Tax Credit. They are interrelated but the rules are different for each.

The support test is different for each type. The support test, for a QC, is only that the child didn't provide more than half his own support. The support test for a Qualifying Relative is that the taxpayer provided more than half the relative's support.