Is my son a dependent?

[rgcosta]

Hello,

My son made less than needed to be considered independent in 2022.  But he did get enough in disability payments so that if I added that to his income he would not be considered a dependent.  

Therefore, does disability count as income?

Thank you. 

[Opus 17]

You don't provide enough information.  Disability payments don't count as taxable income toward the income limit, and they count as "support" for one test but not the other test.

To be a qualifying child dependent, the child

1. is under age 19, or under age 24 and a full time student, or any age but disabled and unable to perform gainful work.  (Note that being able to work a minimum wage job is usually considered proof that a person is not "disabled" for tax purposes even if they have medical condition.)

2. lives with you more than half the year

3. does not provide more than half their own support (disability payments from the government do not count as support provided by the child for themself, since the payments come from outside.)

To be a qualifying relative dependent, the child

1. If your own biological or legal child, can be any age and live anywhere (does not have to live at home),

2. Not have more than $4400 of taxable income

3. You must provide more than half the child's total support.

Note that for qualifying relative, you must provide more than half the child's support.  For this test, you need to consider the child's costs for food, housing, medical care, travel, entertainment, tuition and so on, and determine if you pay more than half overall.  Government or other disability payments do figure into this test as support that is not provided by you.  However, the benefits are not "taxable income" for the $4400 test, unless they actually are some kind of taxable benefit.  

For the qualifying child test, the support question is different, it asks "does the child pay more than half", here, benefits paid by someone else don't count as support the child provides for themself, and the parent doesn't have to prove they paid more than half, only that the child paid less than half their own expenses. 

[rgcosta]

Thank you.

[MichaelG81]

No, disability does not count as income if the other income he/she received was under $4,400, do not include Social Security, unless he/she meets the thresholds below with earned income. Again if earned income for year is below $4,400, no problem in claiming him do not include Social Security. But when doing their taxes they must indicate they are being claimed as a dependent by someone else, even if just to claim the taxes they paid for a refund.

According to the IRS:

Are any of your benefits taxable?

If the only income you received during the year was your social security or equivalent tier 1 RRTA benefits, your benefits are generally not taxable.

If you received income during the year in addition to social security or equivalent tier 1 RRTA benefits, part of your benefits may be taxable if all of your other income, including tax-exempt interest, plus half of your benefits are more than:

$25,000 if you are single, head of household, or qualifying surviving spouse;

$25,000 if you are married filing separately and lived apart from your spouse for all of 2022;

$32,000 if you are married filing jointly; or

$0 if you are married filing separately and lived with your spouse at any time during 2022.

For more information, see the instructions for Form 1040 or 1040-SR, lines 6a and 6b, and Pub. 915, Social Security and Equivalent Railroad Retirement Benefits.

@rgcosta 

[rgcosta]

Thank you so much. This means I can claim him.

The Disability form looks like a W2 but does not say that.  It has Third Party Sick Pay checked.  Do  put this as a W2 or does it have another name.

RC

[ThomasM125]

The disability income is normally reported as wages, so you should enter it as a W-2.

[rgcosta]

Thank you.  

So the sick pay which is clearly says on the W2  and  which I may be incorrectly calling disability, puts him over the $4,400.   Will that trigger something with the IRS or do they look to see it was actually sick pay.

Thank you again.  

[PattiF]

Third-party sick pay may be nontaxable or taxable. If there is an amount in Box 1 of the W-2, then that amount is taxable. Please see this TurboTax Help article for more information about Third-party sick pay. 

As Opus17 wrote above, your qualifying relative may not have more than $4400 of taxable income. If there is a taxable amount in box 1 of the W-2 that is more than $4,400 as you mentioned, then he cannot be claimed as a dependent.