Other Tax Questions
Questions and comments on other topics covered in Fairmark.com, such as UTMA accounts, and any tax questions that don't fit our other categories.
Deductibility of Medical Expenses for a non-dependent child
Posted by: amanda, September 3, 2009 02:28AM
Can health insurance premiums paid on behalf of a 40 year old child be deductible on the parent's tax return for a child who is not claimed as a dependent on the parents' tax return. The child files her own tax return and claims herself as an exemption.

The child is self-employed and has maybe 20,000+ of self-employment income. Her parents provide other significant support for her besides the health insurance premiums but she claims herself as an exemption on her own tax return.

Thank you.

Re: Deductibility of Medical Expenses for a non-dependent child
Posted by: Drewremedy, September 3, 2009 02:35AM
Since when is a gift to your child deductible?


No there is no tax deduction for paying somebody's medical insurance.

You might have confused it with the exception in tax code for if you pay somebodys medical or education bills directly to provider --even $200,000 worth it is not a taxable gift.

Re: Deductibility of Medical Expenses for a non-dependent child
Posted by: amanda, September 3, 2009 02:54AM
I understand that paying someone else's medical insurance would not be deductible, but since it is my child and I probably provide more than 1/2 of her support so she would qualify as my deduction if she did not claim herself. Therefore, I thought I would be able to take the medical insurance I paid for her as my deduction.

Re: Deductibility of Medical Expenses for a non-dependent child
Posted by: Boutwell, September 3, 2009 03:17AM
You can deduct medical expenses you paid for someone who would have qualified as your dependent except that the person didn't meet the gross income or joint return test.

Re: Deductibility of Medical Expenses for a non-dependent child
Posted by: amanda, September 3, 2009 04:00AM
Thanks, but what if my SINGLE daughter did not live with me in 2008, filed her own tax return (ie did not meet the gross income test), was 40 years old (over 24 not a student), took herself as a exemption on her own return...but I paid more than 1/2/ of her support because her self-employment income was not sufficent to live on.

Can I take a medical deduction on my return for the medical insurance I paid for her..That is the issue....

Re: Deductibility of Medical Expenses for a non-dependent child
Posted by: BetweenTheHedge, September 3, 2009 04:48AM
Boutwell correctly responded that medical expenses you pay for another person are deductible if the only test disqualifying you from claiming the dependency exemption is gross income.

Your child qualifies as your dependent if she is either your "qualifying child" or a "qualifying relative." The tests for qualifying child and qualifying relative are explained in Table 5 on page 10 of Publication 501.

[www.irs.gov]

Your daughter does not meet the tests for qualifying child. However, she possibly meets all of the qualifying relative tests except for gross income. For purposes of test # 2, see "Relatives who do not have to live with you" in the right column on page 15. Note again that for purposes of deducting her medical expenses, the gross income test (test # 3) is striken.

I've explained the rules above and directed you where you can read them for yourself. You have to determine if you meet the requirements of the law to deduct her medical expenses. As they used to say on Monday Night Football, you make the call.

Re: Deductibility of Medical Expenses for a non-dependent child
Posted by: Art, September 3, 2009 03:19PM
>>> Boutwell correctly responded that medical expenses you pay for another person are deductible if the only test disqualifying you from claiming the dependency exemption is gross income.
<<<


I thought it was gross income and/or joint return test?

Re: Deductibility of Medical Expenses for a non-dependent child
Posted by: amanda, September 3, 2009 04:56PM
Art, and Between the Hedge...Thanks for your replies but I am still confused. FYI, I referred to Pub 501 before I posted my question and was confused by the IRS Pub that is why I posted.

Bottom line, my daughter does not meet the qualification tests to be a 'Qualifying Child' since she is over 24 and does not live with me.

OK, so I then thought she might be a 'Qualifying Relative'.....

Tests to be a Qualifying Relative:

1) Person Cannot be a Qualifying child - she meets that test
2) She did not live with me - But she meets that test since she is a "relative who does not have to live with me"
3) The person gross income must be less than $3,500. As stated in the publication the only exception I see is if the person is disabled and works in a sheltered workshop. - She does not qualify under this test since she had self employment income of over $20K BUT, if I understand what 'Between the Hedge' stated is that the gross income test is not required if it is a daughter the gross income test is NOT required to be met.

The question I have is that true....Does the Gross Income Test (Gross Income must be less than $3,500) have to be met for a daughter to qualify as a Qualifying Relative??? If she is excluded from meeting this test, she would qualify since I provided more than half of her support (Test 4).

Please help....I cannot find where it stated that the Gross Income test can be ignored for a daughter to be a Qualifying Relative. I paid $11K of Medical Insurance for my daughter and I do not know whether it is deductible as a medical expense on my return.

Can someone please help me with this...I simply cannot any reference to this situation.

Thank you so much....

Re: Deductibility of Medical Expenses for a non-dependent child
Posted by: tomd37, September 3, 2009 06:02PM
The way I read IRS Publication 17, Chapter 3, Personal Exemptions and Dependents is that Amanda can claim her daughter as a dependent (and therefore claim her daughter's medical expenses as an itemized deduction on Amanda's return) only if the daughter can legally be claimed as dependent on Amanda's return.

The term dependent means either a qualifying child or a qualifying relative. Amanda can claim an exemption for a qualifying child or a qualifying relative only if three tests are met. 1) Dependent taxpayer test; 2) Joint return test; 3) Citizen or resident test. I believe these three tests can be met.

The next step appears to be determining if the daughter is a qualifying child or a qualifying relative. The daughter, by virtue of her age is not a qualifying child.

The daughter may be a qualifying relative if four tests are met. 1) Not a qualifying child test; 2) Member of household or relationship test; 3) Gross income test; and 4) Support test. The daughter meets the not a qualifying child test. The daughter meets the member of household or relationship test (relationship test in this situation). The daughter does not meet the gross income test. I cannot determine whether or not the support test can be met. The accurate use of Worksheet 3-1 on page 33 of Pub 17 should be completed for this particlar test requirement.

However, since the Gross Income Test has not been met, I do not see where Amanda can claim the daughter as a qualified dependent on Amanda's return. The daughter does not meet the gross income test and therefore cannot be claimed as a dependent (qualifying relative) on the return.

In my opinion it is end of story. Amanda paid the medical expenses for her daughter, but cannot claim such expenses on her return because she cannot claim the daughter as a dependent on her return and she must be able to legally claim the daughter before she can claim the daughter's medical expenses.

Now it appears the daughter should file her tax return reflecting all her income and expenses as appropriate. The daughter cannot claim the medical expenses because she did not pay them (her mother did).



Tom D.

Re: Deductibility of Medical Expenses for a non-dependent child
Posted by: BetweenTheHedge, September 3, 2009 06:21PM
> Amanda paid the medical expenses for her daughter, but cannot claim such expenses on her return because she cannot claim the daughter as a dependent on her return and she must be able to legally claim the daughter before she can claim the daughter's medical expenses.

That is not correct. Amanda can deduct the medical expenses she paid for her daughter if the only disqualifying dependency test is gross income (married filing joint is moot since daughter is single).

Amanda cannot claim a dependency exemption for the daughter.

Re: Deductibility of Medical Expenses for a non-dependent child
Posted by: Art, September 3, 2009 07:04PM
Hedge is correct.

Since this is a discussion of Medical Deductions, you need to use the definition of a Dependent For Medical Purposes.

That discussion can be found on page 4 of [www.irs.gov]

As you will see there is no gross income test in Pub 502.

(Nor a joint return test but we can skip that as Hedge said.)



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