Can I count my uncle as a dependent since he lives with me, has cancer and is unemployed?

Forum|Forum|4 years ago
February 26, 2022
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FangxiaL

Level 10

It depends. If his gross income is less than $4,300 and you provided more than one-half of his support, then you can claim him as your dependent.

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Hal_Al

Level 15

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 and student status test, a relationship test and a residence test. Only a QC qualifies a taxpayer for the Earned Income Credit and the Child Tax Credit. The Other dependent (qualifying relative) credit is worth (up to) $500 per dependent and is non-refundable. That is, it can only be used to reduce an actual tax liability.

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 (2020-21). For the $4300 income test, unemployment compensation is income.
The taxpayer must have provided more than 1/2 his support

In either case:

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

He must have a US social security number or tax identification number (TIN)

Nontaxable Social security 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 you, for the support test. Money she puts into savings & investment does not count as support she spent on herself. Note that an aunt/uncle 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 his 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.