Can I claim grandmother as dependent?

Question

I have taken care of my 80 year old grandmother for the last 10 years. She makes 2500.00 a month tax exempt income. She receives a veterans pension (tax exempt) social security and a retirment pention for 350.00 and social security is like 1200.00 and her veterans pension is like 900.00 so she does not file taxes because her CPA told her she did not have to because all her income was tax exempt. Now I we pay for some of her care and for her room food and clothes. The rest she uses for her care and deductables on medical bills. So I have never claimed her all these years but someone said I was crazy for not claiming her and I thought she made too much money to claim her so I never did. Until someone said that money is only on taxable income. Is this true. By the sounds of what I said do you think I could claim her?
Thank You in advance for any info

Answer 1

Probably not, for two reasons.

First the $350 a month retirement pension - that doesn't sound like it's non-taxable, at least most pensions aren't. She wouldn't have to pay taxes on it, since the veterans pension is non-taxable and her social security would not be taxed since her taxable (?) income, the retirement pension, isn't enough to be over the limit to make her social security taxable. But at $350 per month, that would take her over the limit of $3300 a year in gross income to would not pass the gross income test for a dependent.

The person who told you that her veterans pension and social security would not count is half correct - but it's only for the gross income test, not the support test.

The second issue is, do you provide over half of her support? If she's using her income toward her own expenses, even though the veterans pension and social security aren't included for the gross income test, they would be included for the support test, where you'd have to be providing more than half of her support. You'd have to show that you are providing more than $29,400 per year toward her support to be able to claim her.

Answer 2

Her monthly income is $4950 per month, I doubt it costs over $10,000 a month to support her so my guess is that you do not pay over 1/2 of her support so my answer is NO you cannot claim her. Nice try though.