Disabled adult son married, wife's parents to claim her

[Margaret CPA in OH]

A long time client has claimed their adult disabled son since adoption many years ago but he married in September.  Both live with client. I am struggling trying to check all the boxes for these folks.  Son made $941 and has SSA of $1800.  New wife earns about $1400 monthly. If son files MFS, can he get EIC?  Can parents still claim him as dependent?  Is it correct for new wife, also disabled, to be claimed by her parents?  She did not live with my clients and new husband for a full year. I think she must file MFS and client will ask her parents who manage her funds how they have been filing.

Why me?  Thanks for any comments.

[Lion EA]

Margaret, you get some real doozies!

[mcb39]

He can't get EIC if he doesn't claim himself as a dependent.  It was super nice that one year when they allowed people over 65 to get EIC; this case would be a good example. (Maybe)

[mcb39]

3 hours ago, Margaret CPA in OH said:

A long time client has claimed their adult disabled son since adoption many years ago but he married in September.  Both live with client. I am struggling trying to check all the boxes for these folks.  Son made $941 and has SSA of $1800.  New wife earns about $1400 monthly. If son files MFS, can he get EIC?  Can parents still claim him as dependent?  Is it correct for new wife, also disabled, to be claimed by her parents?  She did not live with my clients and new husband for a full year. I think she must file MFS and client will ask her parents who manage her funds how they have been filing.

Why me?  Thanks for any comments.

I have several clients with adult disabled  children, but this one takes the cake.

[Pacun]

EIC is not available if filing MFS.

Income limit will play a role since they are not permanently disabled. So female will not be able to be claimed as a dependent by anyone. Male can be claimed by parents or by whoever qualifies to claim the exemption. 

If they file jointly, they will qualify for EIC because their salary seems to be low enough.

[mcb39]

9 hours ago, Pacun said:

EIC is not available if filing MFS.

Income limit will play a role since they are not permanently disabled. So female will not be able to be claimed as a dependent by anyone. Male can be claimed by parents or by whoever qualifies to claim the exemption. 

If they file jointly, they will qualify for EIC because their salary seems to be low enough.

Where does it say that they are not perrmanently disabled?  If they are receiving SS Disability, it is not taxable earned income and the girl can be claimed as a dependent.  It sounds as though the EIC would be pretty minimal in any case.  OP doesn't state whether the Female's income is earned or SS Disability.  This is a convoluted case.

[Margaret CPA in OH]

Both are permanently disabled, Down's, I believe, although wife is able to to hold a regular sort of job.  I don't know what she does.  It may be in a sheltered workshop.  Client's son has a regular SSA 1099, maybe because of age? or is SS Disability reported the same way.  I've not had anyone on disability before. I'm waiting to hear what wife's parents say about her work and filing but it sounds as if MFS for client's son is the way to go.  The total income is below income requirement for filing so maybe just skip it.  I just get nervous not reporting income from documents like W2's even if low.

I guess I'm just confused about each of these folks being claimed as dependent on their respective parent's return.  I understand that wife did not live with my client's son in their home for the entire year so she is out for my client.  What about 2025 when she will have lived in their home for the full year? 

Yes, a convoluted case. I really don't want any more of these, you know?

[mcb39]

Disability SS is reported the same as regular SS.  It is not taxable.  Let his parents take him as a dependent.  At least he is worth $500 to them.  File him MFS if he has any withholding to get back without taking himself as a dependent.  This is the best advice I can come up with at the moment.  As for 2025; who knows what the laws will be?

[Jim Oh Bkkr]

11 hours ago, mcb39 said:

Disability SS is reported the same as regular SS.  It is not taxable.

 

11 hours ago, mcb39 said:

File him MFS

Isn't SS taxable under MFS unless they lived apart for the last 6 months of the year?  That used to be the rule. It probably still would not result in a tax liability.

[Pacun]

21 hours ago, mcb39 said:

Where does it say that they are not perrmanently disabled?  If they are receiving SS Disability, it is not taxable earned income and the girl can be claimed as a dependent.  It sounds as though the EIC would be pretty minimal in any case.  OP doesn't state whether the Female's income is earned or SS Disability.  This is a convoluted case.

I guess we have to see what the doctors have on paper. Permanently disabled to me it means that you cannot take care of yourself... let alone have a job and possible "help others while performing your duties". 

[BrewOne]

You have to be careful about which category of Social Security income you are referring to.  And beyond my ability to explain in just a few lines.  But you can work, as long as you can't do "Substantial Gainful Activity" (current limit $1,620 a month of earned income).

 

[Margaret CPA in OH]

Thanks for replies and discussion.  Client's son earned just $941 no FTW and SS was $1824.  Dependent chart shows a qualifying relative has to live in home for the full year and wife did not in 2024 but will in 2025.  I asked about MFS thinking there was the possibility of EIC but her learned that isn't an option.  While client said wife earns $1400 per month (looks to be under the $1620 BrewOne states), it is not an issue for 2024 if each adult disabled child will be claimed by their respective parents.  I think I have ti for 2024, we'll see about 2025 and how the respective parents resolve the fact that they live together the full year in my client's home.

Small issue is that client said the 'pay rent' of $200 per month for their private room and bath.  I asked client to track how much support they provide, allocation of utilities, additional food purchases, etc.  I  think it is more reimbursement or sharing of expenses.  Thoughts?

These folks are amazing.  Over the years this nurse practitioner and now retired physician have fostered about 8 children, all with special needs.  They adopted this one son and now have custody of a granddaughter of another former foster.  Idealists from the 60's  actually making a difference, in my opinion.