Personal Dependent. If a person pays for more than 50% of the support of a relative, and the relative has minimal gross income for the year and has not filed a joint return with his or her spouse, then the person paying the support may claim the relative as a dependent on the person's federal income tax return. For purposes of calculat­ing the 50% requirement, tax-exempt interest income, disability income and Social Security income, of the relative is counted. However, for purposes of calculating the gross income of gross income, tax-exempt interest income, disability income and Social Security income are not counted. If a person claims a relative as a personal exemp­tion, the relative must not file a joint return. ( I.R.C. §151(c)(1­)(A) and I.R.C. §151(c)(3))

Relative is defined as "a child or descendant of a child; stepchild; brother, sister, by whole or half-blood; stepbrother, stepsister; father, mother or ancestor of either (grandparent, great-grandpar­ent, etc.); stepfather, stepmother; nephew, niece; brother or sister of father or mother (uncle, aunt); brother-, sister-, father-, mother-, son-, or daughter-in-law." ( I.R.C. §152(a), (b)1 and Treas. Reg. §1.151-3(a))

Medical Deduction - Relative. Under I.R.C. §152(c) and IRS Publica­tion 502, a person can claim a medical deduction for medical expenses paid on behalf of a relative, if the person provided over half of the relative's total support for the calendar year. The person can deduct the medical expense of the relative, even if the person cannot claim the personal dependent exemption because the relative received significant gross income.

A relative is defined in I.R.C. §152(a), (b)1 and Treas. Reg. §1.151-3(a) as "a child or descendant of a child; stepchild; brother, sister, by whole or half-blood; stepfather, mother or ancestor of either (grandparent, great-grandpar­ent, etc.); stepfather, stepmother; nephew, niece; brother or sister of father or mother (uncle, aunt); brother-, sister-, father-, mother-, son-, or daughter-in-law."

The taxpayer claiming the exemption must, in combination with other taxpayers (i.e., children), provide more than half of the support of the dependent individual for the calendar year. The taxpayer claiming the dependent must have individually provided more than 10% of the individual's support. The taxpayer must sign a Multiple Support Agreement Form 2120 if:

(1) The taxpayer provided less than half of the dependent's support for the calendar year; but

(2) The group provided more than half of the support; and

(3) No one person furnished more than half of that support; and

(4) The taxpayer contributed more than 10% of the support; and

(5) Each person in the group contributed more than 10% signs a written declaration (Form 2120 can be used) that he/she won't claim that individual as a dependent for any tax year beginning in the calendar year. (I.R.C. §152(c))

All of the declarations must be attached to the return of the taxpayer claiming the dependency deduction. (Treas. Reg. §1.152-3(c))

Dependent Care Credit. This is available to a child on behalf of a dependent parent although the parent has significant gross income. However, the parent must be physically or mentally incapable of providing self-care (i.e., cannot provide for his or her own hygiene or nutrition­al needs, or needs the full-time attention of another person for the parent's safety or the safety of another. The purpose of the credit is to reimburse for care expenses related to the taxpayer leaving home to take employment. Taxpayers are usually better off taking the care expenses as a medical expense deduction.