Question regarding claiming parents as dependents for 2025 Taxes

[achung0315]

Hello, I have a question regarding claiming my parents as dependents. I am currently providing residence and other necessities as they don't have income. For the year 2025, my dad withdrew about $16,000 from his Traditional IRA and closed the account. I understand if they have earned income of over $5,200, I can not claim them as dependents. Since the income is from traditional IRA, does it still count as earned income? Also if that count as an earned income, and my parents file taxes as married filing separate, can I at least claim my mom as a dependent? Thank you in advance! 

[xmasbaby0]

You misunderstood the criteria regarding income.   If your father had more than $5200 of income not counting Social Security, he cannot be claimed as anyone else's dependent.   It is not "earned income" from working that is the only income that "counts" --- it is ANY other income besides Social Security.   If he had $16,000 from a retirement account in 2025 he cannot be claimed as your dependent.

If they do not file a joint tax return -- and your mom had less than $5200 of income not counting Social Security you may be able to claim your mom as a qualifying relative dependent, for whom you will get the non-refundable $500 credit for other dependents.

Qualifying relative

• They don't have to be related to you (despite the name).
• They aren't claimed as a dependent by someone else.
• They're a U.S. citizen, resident alien, national, or a Canadian or Mexican resident.
• They aren’t filing a joint return with their spouse.
• They lived with you the entire year (exceptions apply).
• They made less than $5200 in 2025 (not counting Social Security)
• You provided more than half of their financial support.

When you add someone as a dependent, we'll ask a series of questions to make sure you can claim them. There may be other tax benefits you can get when you claim a dependent.

Related Information:

• What does "financially support another person" mean?
• What is a "qualifying person" for Head of Household?

[Hal_Al]

1/10/26 Edited 

There's a very small chance that  you can still claim Dad as a dependent too.  People were allowed to make non-deductible contributions to a traditional IRA (this was popular prior to the advent of the Roth IRA).  If the taxable portion of the $16,000 distribution was less than $5200 (and that was his only non social security income), you can claim him as a dependent. 

[achung0315]

Thank you for the answers - the $16,000 was from the traditional IRA so everything is taxable. So the best way to proceed would be the following? 

1. Dad files Married Filing Separate - Pay taxes he owes if there are any

2. Mom does not have to file taxes - No income 

3. I can claim mom as a dependent since I am providing shelter for my parents 

Thank you! 

[Hal_Al]

Q So the best way to proceed would be the following? 

A. Yes, depending on the numbers. But, upon closer examination, probably not. 

Taxes are complicated. There's a catch, I didn't consider earlier. 

Social security  becomes taxable when a person's income, including 1/2 their social security, reaches:

   -Married Filing Jointly (MFJ): $32,000

   -Single or head of household: $25,000

   -Married Filing Separately (MFS) and lived with your spouse at any time during the tax year: $0

Since Dad will be using the MFS filing status, he has to report his SS income.  Depending on how much SS income he has, his tax  may be more than the $500  (other dependent credit) you get for claiming Mom.

[achung0315]

Good morning, Thank you for the reply. Both my parent's are not collecting social security benefits yet as they're waiting for a full retirement age - That being said there is no SS income to reply so the way I listed above should be the best way to go in terms of getting maximum refunds from the IRS? 

Thank you.

[Hal_Al]

Q. There is no SS income, so the way I listed above should be the best way to go in terms of getting maximum refunds from the IRS? 

A. Yes.