Can I claim my adult child who lives with me as a dependent if she receives SSI payments as her only income

[yahootvr]

My wife and I are in our 60's and have a daughter in her 40 with disabilities. She has always lived with us and we have always payed 100% for her living expenses and counted her as a dependent. In Jan of 2017 she applied for SSI but was not approved until Aug. They backed paid her to Jan when she was approved. SSI is her only source of income and we charge her rent so she can get a higher SSI payment. (SSI Payment ~$730 a mo, Rent ~$330 a mo) We paid for her Health Insurance through the Marketplace for all of 2017 and received an 1095-A form in our name. 1) Can we count her as a dependent on our TAX for 2017? 2) does she have to file TAX's in her name for 2017. 3) Do we have to count her rent in our taxes?

[Vanessa]

Yes, if she has been considered a dependent on your return up until this year and nothing else has changed, the fact that she is receiving SSI is not going to change that if she still is not providing over half of her own support. 

SSI is not taxable, so if she has no other income she does not need to file a tax return.

Yes, the rent will be counted as income on your tax return.  Since you are not likely charging a fair market value for the rent, you can only deduct rental expenses up to the amount of the rent.   To do that you will take the following steps:

• Click Federal
• Wages and Income
• I'll Choose what I work on
• Scroll down to Less Common Income
• Click Start next to Miscellaneous Income
• Scroll down and click start next to Other Reportable Income

[Edited 2/18/2020 @ 8:22AM PST]

[Superstarscout]

If I am charging my adult disabled child their fair share of expenses then my taxable income is zero.  How do i report the net amount of zero? Your solution only reports the total revenue I received not the expense

[Waldo19]

Where do you enter the expenses for renter up to amount you receive? If in deed the amount of rent is less then fair value. 

Can anyone answer can you claim an disabled adult child as a dependent and as a renter?

[MaryM428]

You can claim the disabled adult as a dependent if the disabled person qualifies under the IRS rules for dependents..  You claim the rental income and expenses On Schedule E.  

In TurboTax you enter your rental property information, income, and expenses in TurboTax Premier.  When renting to a family member it is important to be sure that you are charging fair market rent for the property that you are renting.  

You could rent a residential home, apartment, or room in the family home to the disabled audit.

IRS Publication 501 lists the rules for claiming a dependent.

[shfoos01]

Here's another wrinkle on this subject that I need help with.  My child is 20 and receiving disability SSI. We charge him 300 for "rent" which goes to cover less than 50% of his living expenses such as food, utilities, personal care, medical insurance etc. TurboTax says I can claim him as a dependant even though he has SSI income. However, since I am still covering more than half of his living expenses, he's a child dependent, and SSI isn't taxable, do I still need to claim the small amount of rent as miscellaneous taxable income?  When I tested this in TurboTax, I was charged almost half the amount in tax as what I received during the year so I want to make sure that a child covering part of their living expenses is considered "rent" and needs to be claimed in this way.  Thanks! 

[MaryM428]

It depends.  If you are charging rent and reporting it to Social Security in order to increase SSI benefits, then you need tp report that rent and pay taxes on the income from it. 

If you are not reporting the rent to social security than you do not have to claim it on your return.
 

You need to determine if the rent you are charging is a "fair rental value" for the percentage of the house that he is renting.  If you are charging a fair rental value than you can claim rental expenses on Schedule E for that percentage of the house.  Expenses should offset much of the rental income.

If the dependent is taking care of at least half of his living expenses, the parents can still claim the EITC.