Claiming Zero income Parents who accidentally filed Married Jointly as Dependents?

[Howard424]

Am I still able to claim both of my elderly parents as my dependents if they already filed with IRS as Married Filed Jointly (MFJ)? Basically, this is the first time I am trying to claim them as my dependents, they had no taxable income for 2022, and they already filed tax to IRS for no reason but just as a habit they been doing every year, but they did specify on their forms that someone will claim both of them as dependent.  However, when I am trying to use Turbotax to file my tax as Head of House and including their names on my return, IRS reject my application right away saying their SSN had been filed as spouse. Any tax expert please tell me if they are still quality to be claimed as my dependents or there is no way IRS will accept my application. I tried to call IRS today, and their tax law representative was not helpful, basically he just told me no and hung up on me. But I read somewhere says there are exceptions. Please help me if you know something! Thank you very much!!!

[Vanessa A]

If they filed a joint return, did they e-file?  What income did they include? Do they have pensions? Investment income? Did they itemize their return? You cannot e-file a $0 return so it seems like they would have had some sort of income unless they paper filed.

In order for them to file a joint return and you to claim them, they would only be able to file in order to claim a refund of taxes withheld.  So without knowing how or why they filed and what they included on their return, it is hard to say if you can claim them with their tax situation.

If you do qualify to claim them as dependents, then you will need to print and mail your return and they would likely need to amend their return to say they can be claimed as dependents. Depending on why they filed, if they have no income and you provide all of their support, they may need to amend to Married Filing Separately in order for you to claim them. 

[Howard424]

Hi Venessa,

They did the e-filed with TurboTax as MFJ. They had less than $100 stock dividend interest income, I guess that's why TurboTax were still able to efile their tax on TurboTax. Also very low Social Security Income which is not taxable income, and lost some money on stock. That's all on their 1040, and they have no tax withholding. They are under standard deduction and no itemization.

The reason they filed tax is because they have the habit of filing, and they didn't know they shouldn't need to with such a low income after retired. They also needed a low income proof for applying Medicaid, so they went ahead and did it. 

So this is the part I am confused,  did they file tax only to claim a refund of taxes withheld? I don't know, because they had no taxable income, so no withheld.  But if I answer No, then they are not eligible. 

They did already specify on their 1040 tax form that someone will claim both of them as dependents.

I was once read someone recommending to Mail the application instead of E-filing, because IRS online system ALWAYS Reject e-file applications in similar situation. But I'm just not yet be able to get a right answer.

BTW, I did the research, I read IRS and TurboTax does not allow couple to amend from MFJ to MFS. I tried and not working.

[Vanessa A]

For 2022, you may be better off not trying to claim them. Since they do have SS, if their taxable portion of social security for each of them is more than $4,400 then you would not be able to claim them. If the taxable portion is less than that, then you can attempt to amend. 

What happens when you try to do the amendment? Does it give you a rejection, an error, or just refuses to allow you to do so?  You are still in the allowed timeframe to change from MFJ to MFS. After April 18th, you would not be able to do so. I would suggest creating a dummy account prior and entering their income separately to see what their actual taxable income would be individually prior to trying to amend the return.

There are 2 loopholes to allowing them to file a joint return and being able to be claimed. 

1. If filing separate returns  neither of them would owe any tax then you would still be able to claim them even if they filed jointly.   
2. They are filing a return simply to claim a refund

However, when filing separately and selecting someone else can claim them as a dependent, it is very possible they will then have to pay taxes in, even if they just have social security and $100 in dividend income. If you claim them as a dependent, then their standard deduction will decrease to $2,550 (if they are over 65) and they would likely end up owing taxes when filing a separate return.   How much would depend on how much social security they received. Again, you can do a dummy return to see if it is worth making the change for this year or if the gain you would have would be offset by the taxes they would owe. 

If you do choose to file a 1040X for them, then you would need to manually enter the numbers if TurboTax is not allowing you to make any changes, filing a form for each of them with their original joint return numbers in Column A and change them to their individual numbers in column B of the 1040X.  You could use the dummy return to get the individual numbers. 

Yes, at this point, no matter what you would do if you claim them, you would need to print and mail your return as it takes several months for an amended return to be processed and your return would not go through electronically without their returns being amended.