Can I claim my father and sister even though they live in another country?

[mch5690]

I supported my sick father and his 5 year old daughter (my half sister) financially for majority of 2021. They are both US citizens and my father used to receive Social Security benefits, and that was the only income he had, other than the support I provided. However, they did not live with me at all and they lived in another country. Can I claim them as dependents? And if yes, does that mean my filing status should be Head of Household? 

[ColeenD3]

You may be Head of Household.

Special rule for parent.

If your qualifying person is your father or mother, you may be eligible to file as head of household even if your father or mother doesn't live with you. However, you must be able to claim an exemption for your father or mother. Also, you must pay more than half the cost of keeping up a home that was the main home for the entire year for your father or mother.

If you pay more than half the cost of keeping your parent in a rest home or home for the elderly, that counts as paying more than half the cost of keeping up your parent's main home.

Here is a checklist for determining whether a relative qualifies.

• Do they live with you? Your relative must live at your residence all year or be on the list of “relatives who do not live with you” in Publication 501. About 30 types of relatives are on this list.
• Do they make less than $4,300 in 2020 or 2021? Your relative cannot have a gross income of more than $4,300 in 2020 or 2021 and be claimed by you as a dependent.
• Do you financially support them? You must provide more than half of your relative’s total support each year.
• Are you the only person claiming them? This means you can’t claim the same person twice, once as a qualifying relative and again as a qualifying child. It also means you can’t claim a relative—say a cousin—if someone else, such as his parents, also claims him.

[Edited 3/26/2022|5:4 AM PST]

[Hal_Al]

Q. Can I claim my father and sister even though they live in another country?

A. Yes, since they are US citizens.

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.  Your sister cannot be a QC, since she doesn't live with you. 

A person can still be a Qualifying relative dependent, if not a Qualifying Child, if he meets the 6 tests for claiming a dependent:

1. Closely Related OR live with the taxpayer ALL year
2. His/her gross taxable income for the year must be less than $4300 (2021).
3. The taxpayer must have provided more than 1/2 his support
4. He must be a US citizen or resident of the US, Canada or Mexico
5. He must not file a joint return with his spouse or be claiming a dependent of his own
6. 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 he puts into savings & investment does not count as support he spent on himself. Note that a parent and sister  are closely related so there is no requirement that they live with you at any time, during the year.

Q. Does that mean my filing status should be Head of Household? 

A. Yes, under a special rule for parents. To claim head-of-household status, you must be legally single, pay more than half of household expenses and have either a qualified dependent living with you for at least half the year or a parent for whom you pay more than half their living arrangements (even if the parent didn't live with you). 

[mch5690]

Thank you for the detailed response!