Severely disabled adult child - dependency

[BulldogTom]

Taxpayers adult child is severely disabled and requires round the clock supervision.   Taxpayers are retired and will be unable to continue to care for child in their home.  Will be moving the child to care facility.   SSI and Medicare will be footing the bill for the facility.   Is the child still a dependent of the taxpayers?  Thinking that moving into a care facility is a temporary medical absence...but I am second guessing myself.

Thanks

Tom
Longview, TX 

[Lee B]

The interactive tax assistant is a good resource for this kind of question.

 

 

 

 

 

rhe

[Yardley CPA]

21 hours ago, BulldogTom said:

  Thinking that moving into a care facility is a temporary medical absence...but I am second guessing myself.

Thanks

Tom
Longview, TX 

Tom...I think your post meets all the requirements of a qualifying relative, except for the support portion.  Assuming the stay in the care facility is temporary, then they probably do qualify as a dependent.  If the stay in the facility is long term and is being paid for by SSI and Medicare, it does not sound as if though they meet the support test.  In that case, they probably do not qualify.  Just my thinking.   

[BulldogTom]

1 hour ago, Yardley CPA said:

Tom...I think your post meets all the requirements of a qualifying relative, except for the support portion.  Assuming the stay in the care facility is temporary, then they probably do qualify as a dependent.  If the stay in the facility is long term and is being paid for by SSI and Medicare, it does not sound as if though they meet the support test.  In that case, they probably do not qualify.  Just my thinking.   

I don't think the support part is an issue.   The rules state that the dependent cannot provide more than half of their own support.   SSI is not considered provided by the dependent.   Welfare (ie medicaid) is not support provided by the dependent.   Both are provided by the government.   So I think the TP is OK there as they pay all of the cost of keeping up the principal home that the child would be temporarily away from for medical care.   

The problem is - what is a temporary absence for medical care?   I looked up a couple of cases and the IRS standard is "is it reasonable that the person will return to the parent's home after treatment"?  The court seems to agree with the IRS standard, but gives wide latitude to the taxpayer and is careful not to make the IRS or the tax court the decider of the facts and circumstances that would determine when or if the dependent will return.  The court seems to say that if there is a chance that the treatments at the facility could lead to the child returning to the parent's home, then the absence is temporary.

My aggressive take - if the facility were to close down, the child would return to the parent's home (having no where else to go), therefore that is the child's principal place of abode.  Therefore dependent.   

My conservative take - the child will never recover from the medical conditions and will always need care that the parents can no longer provide in their home.  Therefore not a dependent.

My practical take - we are only talking about a small amount of credit for the parents every year.   As long as the parents are alive and together, filing status is not an issue.   But what if one of them passes, the other might benefit greatly from HOH status.

Thanks for letting me barf out my thought process.   Feel free to criticize if it is warranted.

Tom
Longview, TX

[Medlin Software, Dennis]

If the disabled person has no other income, it is likely the first cent each year the parents spend on the disabled person makes them provide enough support to be more than half. Unless there is money or goods provided by someone else. The disabled person likely has personal property at the parent home, and may even spend time there, so it remains the disabled person’s home (like college students away from home).

[Medlin Software, Dennis]

We have a disabled adult child and are part of a parent group. There are no one stop resources for parents in our position. We have to teach each other.