Disabled Depedent Sister qualification

[tonyku321]

Hello,

I am going through the questions about whether my disabled sister qualifies as a dependent.

My sister is NOT a student.

She is not married.

She is disabled.

she lived with my the entire year.

It was all in the U.S.

She did NOT pay for more than half of her support (I paid for more than half).

No relatives of my sister lived with me during the year, therefore no one else helped with her support.

It now says my sister qualifies as a dependent.
My question is, why didn't the software ask if she made more the $4300 in taxable income? She received more than $4300 in Social security disability income from the government, which is taxable. Does that not matter in this case, because she is disabled? I don't understand why the software didn't ask that question.

[VolvoGirl]

Well Social Security doesn't count towards the 4300 income requirement.  And if she only got Social Security it is not taxable and she doesn't have to file a return.  You don't include her income on your return.

How old is she?  

[xmasbaby0]

You have not mentioned her age.    If she had more than $4300 of income NOT counting the Social Security you cannot claim her as a dependent.   The SS is taxable only if she had enough other income to make it taxable.    Did she work---even at a part-time job--and have more than $4300 of income from working?   Or does she receive any other sort of income like a pension, rental income, etc.?

She might be your qualifying relative, for whom you can get the $500 credit for other dependents.

CREDIT FOR OTHER DEPENDENTS

https://ttlc.intuit.com/questions/4499708-what-is-the-500-credit-for-other-dependents-family-tax-cre...

IRS interview to help determine who can be claimed:

https://www.irs.gov/help/ita/who-can-i-claim-as-a-dependent

https://ttlc.intuit.com/questions/3113432-who-can-i-claim-as-my-dependent  

[tonyku321]

She is 41. However she receives Social Security Disability insurance, not SSI Supplemental Security Income. Because SSDI is taxed by the government, I would assume it would be counted. Publication 501 on page 19 states "Gross income is all
income in the form of money, property, and
services that isn't exempt from tax."
I"m just confused because the gross income test for adult dependents isn't even being asked about in the software.

[xmasbaby0]

Again....if her only income is the Social Security then you do not need to worry about the amount she receives. from Social Security Disability.       It is only if she has other income over $4300 that would prevent you from claiming her.   And the fact that it is disability does not matter.   You do not get any extra deduction or credit because she is disabled.  

[xmasbaby0]

@tonyku321 And......if you are claiming your sister on your 2021 return, you can get the recovery rebate credit of $1400 ----answer the questions about that in Federal Review and the $1400 credit will show up on line 30 of your Form 1040.

[VolvoGirl]

No any kind of Social Security or SSDI counts too.  SS and SSDI is NOT  taxable unless you have other income.  So only the taxable part of SS or SSDI would count.

Up to 85% of Social Security becomes taxable when all your other income plus 1/2 your social security, reaches:

Married Filing Jointly: $32,000

Single or head of household: $25,000

Married Filing Separately: 0

See IRS pub 501 page 19 Gross Income Test

https://www.irs.gov/pub/irs-pdf/p501.pdf 

income in the form of money, property, and services that isn't exempt from tax.
In a manufacturing, merchandising, or min- ing business, gross income is the total net sales minus the cost of goods sold, plus any miscella- neous income from the business.
Gross receipts from rental property are gross income. Don't deduct taxes, repairs, or other expenses to determine the gross income from rental property.
Gross income includes a partner's share of the gross (not net) partnership income.
Gross income also includes all taxable un- employment compensation, taxable social se- curity benefits, and certain amounts received as scholarship and fellowship grants. Scholarships received by degree candidates and used for tui- tion, fees, supplies, books, and equipment re- quired for particular courses aren’t generally in- cluded in gross income. For more information about scholarships, see chapter 1 of Pub. 970.

[tonyku321]

Thank you all. I was reading Publication 501's all taxable social security benefits in the literal sense that it COULD be taxed, not whether or not it was actually taxed. So she received $11,000 in Form SSA-1099 social security benefits. This has the POTENTIAL to be taxed, which is why I thought she was above the $4300 threshold. But because she was not ACTUALLY taxed on it because she had no other income and didn't reach that $25,000 threshold, she owes no tax, and in addition I can claim her as a dependent.

[Hal_Al]

Q. Because she was not ACTUALLY taxed on it because she had no other income  and  she owes no tax,  I can claim her as a dependent?

A. That is correct. Another way to look at it is: although the whole $11,000 SSDI goes on line 6a of her form 1040, it's the $0 amount on line 6b that counts for the income test. https://www.irs.gov/pub/irs-pdf/f1040.pdf

Nontaxable Social security doesn't count as income, for the income test, but social security money she spends on her self does count as support not provided by you, for the support test.