Older millennials are quickly approaching the sandwich generation phase: taking on greater responsibility for older relatives while also caring for young children. As baby boomers begin to retire, some will need the support of their adult children. In some cases, it may make sense to consider claiming your parent as a dependent on your taxes.
There are a lot of rules about this, and complicating things is the fact that the Tax Cuts and Jobs Act expires on Dec. 31, 2025. That may change many of the rules yet again! Because of this, I’m a fan of turning to tax pros. For this blog post, I sought the expertise of Luis F. Rosa, CFP®, EA, founder of Build a Better Financial Future. (Thanks for answering my questions so close to Tax Day, Luis!)
Why claim your parent as a dependent?
If you contribute a considerable amount toward supporting your parent, claiming them as a dependent qualifies you for certain tax credits. This can help stretch your budget for helping your parent financially. You may also be able to add a dependent parent to your employer’s health insurance, which may include contributing to a family Health Savings Account (HSA) to be applied toward their medical expenses.
However, there are strict guidelines about what counts as a dependent for tax purposes.
How can your parent qualify as a dependent?
Your parent or another adult can qualify as a dependent if:
They aren’t married, or if they’re married, they don’t file a joint tax return with their spouse.
They are a U.S. citizen, resident alien, or resident of Canada or Mexico.
They’re a qualifying relative, which means they have met the following tests:
- They have either lived in your house for a year OR they’re a relative (which includes a child, sibling, parent, grandparent, aunt, uncle, and sibling-in-law). Relatives don’t have to live with you.
- Their gross income is under $4,150 (this is for 2018). Social Security income doesn’t have to be included in the gross income calculation in many cases.
- You provide more than 50% of their support for the year.
Your parent or another adult can be able-bodied and still be your dependent for tax purposes, but if you’re caring for a disabled relative you may be eligible for additional tax credits.
What are the tax benefits?
Single tax filers get the main benefit to claiming a parent as a dependent: the ability to file as a Head of Household. This can lower your tax bill because a higher amount of your income is taxed at a lower bracket than if your filing status is single. Take a look at how the tax brackets compare for the 2019 tax year:
|Tax Rate||Single||Head of Household|
|10%||$0 to $9,700||$0 to $13,850|
|12%||$9,701 to $39,475||$13,851 to $52,850|
|22%||$39,476 to $84,200||$52,851 to $84,200|
|24%||$84,201 to $160,725||$84,201 to $160,700|
|32%||$160,726 to $204,100||$160,701 to $204,100|
|35%||$204,101 to $510,300||$204,101 to $510,300|
|37%||$510,301 or more||$510,301 or more|
As you can see, more of your income is taxed at the lowest 10% and 12% tax brackets when you file as a Head of Household.
You’d also be eligible for a non-refundable $500 tax credit, which begins to phase out (meaning you get less of the credit) when you have a modified gross adjusted income of $200,000 as an individual tax filer, or $400,000 if you’re married and file jointly. A non-refundable tax credit is one where if the amount of the credit is larger than the amount of taxes you owe, you don’t receive the whole credit and therefore don’t have a negative tax bill. For example, if you owe $1,000 in taxes, you’ll only owe $500 after getting the tax credit. But if you only owe $400, you won’t get a $100 refund after applying the $500 credit. Instead, you’ll owe $0 and get to use $400 worth of the credit.
You can include your dependent’s medical expenses in your itemized deductions if you itemize (meaning you don’t take the standard deduction) and have eligible medical expenses in excess of 10% of your adjusted gross income.
If your dependent parent is totally and permanently disabled, you can qualify for the dependent care credit, which can total 20% to 35% (depending on your adjusted gross income) of the cost of care, up to $3,000 for an individual and $6,000 for two or more individuals. You may also be able to set aside pre-tax income in a dependent care FSA if your employer offers it.
Who should I talk to about claiming my parent as a dependent?
Like I said, the rules for this are complicated and may change in 2026. Talk to a financial planner or tax professional like a CPA or Enrolled Agent so you can navigate this situation with expert guidance.