Deductions for medical

[joe pilot]

I pay well over 50% of my brothers Assistant Living expense. He receives over $18000 per year from Social security.

Can I claim him as a dependent and deduct my out of pocket expenses ? 

[Critter-3]

Yes & Yes. 

[joe pilot]

Thanks Critter 3

So I should just go ahead and claim him as a dependent and ignore his SS income .

Then just include him on my medical expenses. Or is there another method ?

[Hal_Al]

Those are  two separate questions.  But, in your case, both answers hinge on the support  test.  There is a special rule that allows you to claim the medical expenses of a person who is not your dependent; known as a "medical dependent rule"*.   

However it's unlikely he qualifies as your dependent if he has $18,000/year to spend on himself.  To be either a medical dependent or regular dependent, $18,000 needs to less than half his total support for the year.

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 $4200 
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

Nontaxable Social security doesn't count as income, for the income test, but social security money he spends on himself 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 sibling is closely related so there is no requirement that he live with you at any time, during the year. But if you provided a home it helps your support case, unless they own the home you live in. If no one person (or married couple) provides 50% of the support (for example your 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

See full rules at: https://turbotax.intuit.com/tax-tools/tax-tips/Family/Rules-for-Claiming-a-Dependent-on-Your-Tax-Ret...

*If your close relative cannot be your dependent because he had more than $4,200 of gross income, but otherwise would have qualified as your dependent (basically that you & other family members provided more than half his support), then you can include in your deductible medical expenses any qualifying medical expenses you paid on his/her behalf just as if he/she was your dependent.

**If he is considered disabled, he may qualify as a dependent under the qualifying child (QC) rules instead.  But there is still a  support test to be met.  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.

[Critter-3]

The SS income doesn't come into play for the income test  however it does factor into the support test.  Since long term care can be very expensive and that SS will not be enough ... so if you can prove you pay more than 1/2 of his total support then you can claim him as a dependent. 

[Hal_Al]

@Critter-3   Thanks for the clarification.  I revised my answer above. In poster's case, both the dependent and medical dependent questions hinge on the support issue.

@joe pilot   Note that the support test can be met by including support provided by others. 

[joe pilot]

Hal Al

So just to clarify, I would be unable to claim him as a dependent but I could deduct his Assistant Living expenses that I pay. Would I just add these medical expenses to my Schedule A Medical deductions or is there a separate method to account for his expenses ?

Thank You in advanced for your help

Joe

[Critter-3]

If you can prove you pay more than 1/2 of his total support then you can claim him as a dependent. 

See the worksheet on page 15:  https://www.irs.gov/pub/irs-pdf/p501.pdf

[joe pilot]

thank you Critter 3

[Opus 17]

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@joe pilot wrote:

Hal Al

So just to clarify, I would be unable to claim him as a dependent but I could deduct his Assistant Living expenses that I pay. Would I just add these medical expenses to my Schedule A Medical deductions or is there a separate method to account for his expenses ?

Thank You in advanced for your help

Joe

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"Assisted living expenses" -- not necessarily deductible as medical expenses.

Normally, you can only deduct expenses that are for actual medical or nursing care.  They do not have to be provided by a doctor or nurse but must be in the nature of services normally provided by doctors and nurses. Such as, administering medication, assistance with eating, bathing, toileting, and so on.  Other non-medical services (housekeeping, laundry) are not deductible, and you must allocate the expenses and only deduct the nursing or medical expenses.

Special rule:

You can count all the assisted living expenses as medical expenses if the patient meets the following tests:

1. The patient has a chronic illness, including cognitive impairment, and requires assistance with 2 or more activities of daily living.  Activities of daily living are eating, bathing, dressing, transferring, using the toilet, and managing continence or incontinence.

2. The assisted living facility provides care services according to a written care plan developed by a qualified professional that is reviewed and updated at least annually.  Most facilities will have a social worker or nurse on site who can develop a written care plan for your family member that will make their expenses an allowable deduction.