Author Trudy Howard.
TAX QUESTION: “My sister lives with me and she receives social security. Can I claim her? If I do claim her will that mess up her benefits?”
ANSWER: This is a loaded question with many moving parts! I’ll break down the answer into pieces to make it easily understood. 1.) Although your sister lives with you, if she is providing more than 50% of her care she is not your dependent. In order for a qualifying relative to be a dependent they must meet several test. 2.) Assuming that you provide more than 50% of your sister’s care, and that her earned income is less than $4,150, (the new 2018 tax law “TCJA” taxable income threshold for dependents) and that she is truly your dependent, listed below are the qualifications for social security programs. The qualifications for social security programs will help you determine if you can claim a dependent that receives social security, and if their benefits will be affected.
SOCIAL SECURITY RETIREMENT:–IRS considers income under $25,000 nontaxable, so these amounts do not count toward the gross earned income of $4,150. If your sister is at full retirement age she can earn as much as she wants, and have unlimited resources and still receive her benefits. Claiming her as a dependent will not affect her benefits.
SOCIAL SECURITY DISABILITY:–This benefit is based on an inability to work, and work history. While there are limits on what a person can earn while on disability, they can receive help from outside sources and retain their benefits. Claiming her as a dependent will not affect her benefits.
SSI–SOCIAL SECURITY SUPPLEMENTAL INCOME--This benefit pays a small amount to those that are disabled, but don’t qualify for regular social security disability. SSI eligibility is based on a person’s access to money & assistance, (aka means, aka support, income, total household income). Per the SSA “Income is any item an individual receives in cash or in-kind that can be used to meet his or her need for food or shelter. Income includes, for the purposes of SSI, the receipt of any item which can be applied, either directly or by sale or conversion, to meet basic needs of food or shelter.” Resources are limited to $2,000 for single people, so if a person is receiving free food, housing, etc. their benefits would be affected. Claiming this person on your tax return COULD AFFECT THEIR BENEFITS.
Although we’ve given you the basics, this is not an all inclusive article. Should you have questions, or need tax preparation assistance please contact us online, or call our office at 855-743-5765.
FACT CHECK SOURCE–IRS Notice 2018-70;
ssa.gov/ssi/text-income-ussi.html Understanding Supplemental Security Income (SSI)– SSI Income
ssa.gov social security benefits