I want to claim my parents as dependents on my tax form, will this affect their medicare benefits in any way?

Question

They are retired and receiving medicare/medicaid benefits. Will claiming them as dependents affect their benefits in any way, such as reduction in benefits, higher out-of-pocket expenses, etc.

Answer 1

No but there are laws about who you can claim. It would be hard to prove you provided more than half their support if they have much income. Even if they waste theirs it is part of their support.

Answer 2

Your parents may well be your dependents for tax purposes. Whether they lived with you or not, you have to have paid more than 50% of their support. They do have to have income of less than $3400, but Social Security is NOT included in this calculation. The most comon sources of income you'll have to look at are pensions, interest, and income from Traditional IRA's - these benefits ARE included in the $3400 limitation.
Claiming them will not affect their current benefits. More and more taxpayers find themselves in your situation, which is why I preach and preach 'retirement planning' to my clients.

Answer 3

Your parents Medicare and Social Security benefits are not reduced because they are your dependents.

Your parents may be your dependents, but you would have to provide over half of their support, and they would not be claiming themselves on their tax return. They have to each have less than $3,400 of income subject to tax as well.

It is not necessary that your parents live with you in order for them to be your dependents.

Answer 4

No, the benefits would not be affected.
You can't claim your parents as dependents unless all of the following are true...
1) Lived with you for all of 2007.
2) Gross income of less than $3,400 for 2007.
3) You provided more than 1/2 of their support for the entire year.
If all 3 are true they must meet citizenship requirements and requirements for married people, if your parents are married.
The details are in the IRS 1040 instruction booklet.