I provide for more than half the support for my disabled brother. We live in Alabama and he is now 19 years, so I can only claim him as a dependent because of his disability. However, his disability is in question as we're going through an appeal process. Can I still claim him if a decision as not been made by Decemeber 31st, 2020?
You can still claim him as a dependent under the Qualifying Relative rules if he meets all the requirements under the rules. You would then be eligible for the Other Dependent tax credit of $500
To be a Qualifying Relative -
1. The person cannot be your qualifying child or the qualifying child of any other taxpayer. A child is not the qualifying child of any other taxpayer if the child's parent (or any other person for whom the child is defined as a qualifying child) is not required to file an income tax return or files an income tax return only to get a refund on income tax withheld.
2. The person either (a) must be related to you or (b) must live with you all year as a member of your household.
3. The person's gross income for the year must be less than $4,300 (social security does not count) in 2020
4. You must provide more than half of the person's total support for the year.
5. The person must be a U.S. citizen or a U.S., Canada, or Mexico resident for some part of the year.
6. The person must not file a joint return with their spouse.
If he is age 19 or older and Not a full time student under the age of 24, to claim him as a dependent under the Qualifying Child rules he must live in your home for over one-half of the year, he does Not provide over one-half of his own support. Or, permanently and totally disabled at any time during the year, regardless of age.
A person is permanently and totally disabled if both of the following apply.
1. He or she can't engage in any substantial gainful activity because of a physical or mental condition.
2. A physician determines that the disability has lasted or can be expected to last continuously for at least a year or can lead to death.
To be a Qualifying Child -
1. The child must be your son, daughter, stepchild, foster child, brother, sister, half brother, half sister, stepbrother, stepsister, or a descendant of any of them.
2. The child must be (a) under age 19 at the end of the year, (b) under age 24 at the end of the year and a full-time student or (c) any age and permanently and totally disabled.
3. The child must have lived with you for more than half of the year. Temporary absences while away at college are considered living with you.
4. The child must not have provided more than half of his or her own support for the year.
5. If the child meets the rules to be a qualifying child of more than one person, you must be the person entitled to claim the child as a qualifying child.
6. The child must be a U.S. citizen or U.S., Canada or Mexico resident for some portion of the year.
7. The child must be younger than you unless disabled.
There are two sets of rules, both of which would result in a $500 credit.
1. Qualifying child
Your brother can be your "qualifying child" dependent if he is,
For dependent purposes, disabled means "unable to perform substantial gainful work, due to a condition that is permanent, or will last at least one year, or will lead to death." The key is "performing substantial gainful work." If your brother can work a regular job, even minimum wage, with minimal special accommodations, that is an indication he can perform gainful work. If he can only work in a sheltered workshop, that is not gainful work. The gainful work test may be different than the test applied by SSI or the VA or other agencies, and he does not have to be certified by another agency as disabled to be a dependent, although it may help. (Conversely, many people who are "disabled" in the physical sense, can still perform gainful work and are not disabled for tax purposes.)
2. Or, he can be a dependent under the "qualifying relative rules." The only factors that relate to your situation is that you must provide more than half his financial support, and he can't have more than $4200 of taxable income. He does not have to live with you, doesn't have to be disabled, and can be any age. For support, you consider who provides support (you, SSI, other family members, etc.) and see if you pay more than half the total. Disability income is not taxable for the taxable income test but does count as support for the support test.