Claimed Disabled Sister-in-Law as Dependent - Do I Need to Report Her Disability Income?

No, you don't report her disability income on your tax return. Her income is still hers, not yours. You're just claiming her as a dependent. As long as her gross income was under $4,700 for 2023 (excluding tax-exempt Social Security benefits), and you provided more than half her support, you're good.

This is actually much simpler than people make it out to be. Think of it like roommates - if your roommate gets income, you don't report it on your taxes. Same principle here. The only difference is that you get a tax benefit for supporting her. The deadline for fixing this if you did it wrong is October 15th if you filed an extension, so you still have time to sort it out if needed.

I've had my disabled brother living with me for 7 years now, and I claim him every year. You absolutely do NOT report her disability income on your return - that's her income, not yours. The only thing that matters is whether her non-Social Security income is below $4,700 (for 2023) and whether you provide more than half her total support. I made the mistake of overthinking this my first year and almost reported his SSDI on my return. That would have been incorrect.

Here's what you need to know about claiming a disabled dependent: • Her SSDI is NOT reported on your tax return • Her SSDI does NOT count toward the gross income test • Her SSDI DOES count when calculating total support • You must provide >50% of total support I spent 3 days trying to reach the IRS to confirm this last year. Finally used Claimyr (https://claimyr.com) and got through to an agent in about 15 minutes who confirmed all of the above. Saved me hours of redial frustration when I needed to verify this exact situation with my disabled cousin. Are there any other dependent-related questions I'm missing?

You're overthinking this. I've claimed my disabled father-in-law for exactly 4 years. His SSDI is $1,842 monthly ($22,104 annually). My support costs for him are approximately $27,850 annually (housing $14,400, food $6,500, medical $3,950, utilities $3,000). Since my support ($27,850) exceeds his contribution from SSDI ($22,104), I meet the 50%+ support test. His SSDI is NOT reportable income on my return. The IRS Publication 501 page 16 explicitly states that Social Security benefits aren't included in gross income for the qualifying relative test. You claim her, but her benefits remain separate from your tax situation.

As of April 15, 2024, the rules for claiming adult dependents with disability income are very clear. You don't report her SSDI on your return - that's her income and stays with her. The key factors are: 1) Did she have less than $4,700 in non-SS income for 2023? 2) Did you provide more than half her total support? If yes to both, you correctly claimed her. The confusion often stems from the fact that SSDI counts when calculating support but not as income for the gross income test. I recommend keeping detailed records of your support expenses in case of audit.

TBH this is one of those tax situations that's simpler than ppl make it out to be. Her SSDI = her income, not yours. You never report it on your 1040. The only Q's that matter: 1) Did she have <$4700 in NON-SSDI income? 2) Did you provide >50% of her total support? If yes to both, you're GTG. The support calc does include her SSDI $ if she uses it for her own support. E.g., if total support = $30k, and her SSDI = $14k that she uses for herself, you need to provide $16k+ to hit the >50% threshold.

Just to make sure we're all on the same page here - are we talking about claiming her as a qualifying relative dependent, not a qualifying child dependent? Because the rules are different for each, right? For a qualifying relative, her gross income must be less than $4,700 (for 2023), but Social Security benefits generally don't count toward this amount unless she has significant other income. Did I understand your situation correctly?