Can I Claim My Indian Parents on My US Tax Return?

Posted on: 02/10/12 220 Comments

 

It's difficult to claim foreign parents on a US tax return.

Make sure you meet all of the requirements before you try to claim your parents as dependents on your U.S. income tax return.

 

Claiming parents is difficult, but it can be done if you pass the “Qualifying Relative” tests. But first, here are the two biggies that tend to get in the way:

  1. You cannot claim a married person who files a joint return with his or her spouse. So if your parents file a joint tax return in the United States, then you won’t be able to claim them. (I’m guessing they don’t, but I wanted to make sure that I told you about that.)
  2. To claim someone as a dependent, the person must be a US citizen, US resident alien, US national or resident of Canada or Mexico. Where my clients have had trouble before is when their parents visit the US, but their visas are only for 6 months, no longer. Then they don’t qualify as US residents. I just wanted to make sure you knew about the 6 month rule because that’s the issue most likely to cause Indian families trouble with claiming their parents.  After that, the rules are the same for anyone else in America who wants to claim their parents on their US income tax return.  You need to pass the qualifying relative test.

 

 

The Qualifying Relative Test has 4 parts:

  1. They cannot be considered a qualifying child of anyone else. No problem! As your parents, I’m guessing they’re both over the age of 24. Easy pass.
  2. Member of household or relationship test. As your parents, they do not have to live with you. Also, since they are your parents, they automatically pass the relationship test. Easy pass.
  3. Gross income test. This one is harder. They cannot have more than than $4,050 in gross income for the year. If they are retired, they might qualify, but if they are receiving a taxable pension, that could kick them out of being a dependent. In the US, for example, my mother in law receives Social Security income which isn’t taxable and it doesn’t count as gross income. Her other income is less than $4,050 so she would pass the gross income test for me to claim her as a dependent. Remember, once your parents become US residents, they will be taxed on their “world wide income.”
  4. Support Test. In order to claim your parents as dependents, you must provide more than 1/2 of their support. Let’s say that your parents each earn $3,000 a year in some type of pension. For you to be able to claim them as dependents, you would have to pay more than $3,000 for support for each of them. For example, if they live with you, then you would consider part of your rent or mortgage to be towards their support. Also food, clothing, medical expenses, etc. If they don’t live with you, who is paying for their rent, food, clothing, etc.? Using my mother-in-law as an example again: although I pay some of her bills, I definitely don’t pay over 1/2 of her support. She pays for her food and rent with her Social Security money so I don’t come close to the 50% of her support.

 

If you do find that you qualify to claim your parents, then you would complete the W7 forms for them, so that they have an ITIN number, and submit them with your next tax return.  I find that the best way to handle the W7 form is to take your tax return in to the nearest IRS office with your supporting documents (like passports) and submit them there.  Although it might be inconvenient making the trip, it will save you a lot of hassle in the long run.

 

 

220 thoughts on “Can I Claim My Indian Parents on My US Tax Return?”

  1. Hi David,
    Your situation is very different from a person claiming parents. You will still file jointly with your wife and you will still claim your children on your tax return. You’re fine. But that’s a really good question. Thanks.

  2. Hello,
    I also have one question.
    I and family(wife and 2 children) been staying in USA for last 10 years and always file Joint Tax return. My wife is H4 visa(does not allow to work).
    In April 2012, my wife and children went to India and are still there. My children are US citizen. So the question is Can I still claim them in my tax return ?

    – David

  3. Hi Runa,
    You will not be able to claim your parents for 2012 because they were not in the United States for over 6 months. But it looks like you may be able to claim them in 2013.

  4. Hi SJ,
    Generally you will not pay taxes on the relocation expenses that your employer pays. There are rules your employer has to follow regarding that and generally your employer will be paying those expenses within the allowable IRS rules.

    Now, if you are filing a tax return as a US resident–the United States taxes your world wide income. It does give a credit for taxes paid to another country. Many countries have a different tax year from the US so you get this “half year” thing going. Use the taxes that you paid during the US tax year on your form 1116.

    If you have not been in the US for an entire year, you may be able to file as a non-resident or a dual status alien–in which case, you would not be reporting your world wide income at all.

  5. Hello!
    My parents in low immigrated (has green card and SSN) to U.S. in the begging of Nov.2012 and they lived with us for 2 months in 2012. We provide financial support 100% during the 2 months. And after they left their country (Kazakhastan) their pension was suspended. So now they don’t have any income at all. Can we claim them as dependent? And what steps should we do?
    Thank you.

  6. Fhaye,
    You can’t claim them this year because they haven’t been here long enough. But it sounds like you’ll be able to claim them next year.

  7. Hi AKK,
    It sound like you have been in the US for over a year and will be filing as a US resident. What you want to do is complete a form W7 for you wife and attach that to the front of your tax return. You will file as married filing jointly–you want that tax status–better tax rate.
    I prefer to take those returns directly to the IRS with your wife’s passport or other identification and let the IRS agent at the office sign things and send it in.
    Yes, it’s annoying to do that, but you’ll save time in the long run. Here’s a link to the W7: http://www.irs.gov/pub/irs-pdf/fw7.pdf

    When you file the 1040, you’ll say “applied for” in the social security number box. It means that you are applying for the ITIN number, not a social security number.

  8. Do you have to pay taxes on the reloaction packages offered by your employer. This package is not there in the W2 provided by them. For relocation, if one qualifies the time and distance test, and employer has paid all the cost of the movement, is employee liable to pay taxes on it?

    Also, do you need to report your income in country X for which you have filed taxes in that country. This issue comes up due to different financial year followed…

    Thanks for you help!

  11. Hi Winson,
    So here’s my question to you: how can your mother-in-law be a US resident if she is living in the Phillipines? If she is a citizen–then you’re okay. If she is not–I don’t see how you can as long as she is out of the country.

  12. I petitioned my parents from philippines & they came here in November 2012 as permanent residents. They dont have jobs, live with me & support them 100%. Can I claim them as dependents on my taxes?

  13. Hi Jan

    Thank you for being so patient and helpful.

    I am a Canadian Citizen living in Michigan under a TN visa. My wife is also living in Michigan with me under a TD visa. She is not allowed to work in Michigan and she is not not working at all for a bout ayear and a little bit now. Can I claim her under my taxes as a dependent. If so how can apply for a tax ID ? do I have any easy options?

    Thank you

  14. Jan, my wife is sending money back to the Philippines each month to support her mother, who is a u.s. resident. Can we claim her as a dependent in our income tax?

  15. Hi Jan, My wife said that I should claim her mother as a dependent even though she is a us resident but living in the Philippines. She relies entirely on our sending money back for her survival. Can we claim her as a dependent in our income tax?

  16. Hi Pradeep,
    Since you were only in the US for 2 months, you will fill a non-resident return. You are married filing separately. You will use the 1040NR tax return. You will not claim your wife.

  18. Hi,

    I got H1B Visa and I travelled to US in November 2012 and my wife had got H4 dependent visa but she is still in India only. She will be travelling to US in another 3 to 4 months.

    When I am filling 2012 tax returns, do i need to file it as Single or do i need to put my marital staus as Married? If I put my marital status as Married, I need to enter my wife’s TIN number.

    So if I file by putting my marital status as Single, will it be a problem? Please let me know how should I file my tax return.

    thanks

    Pradeep

  19. Hi Jan,

    I am in US on H1B visa. My father and mother visited me from 11 July, 2011 to 30 Jan, 2012. My father is retired person and my mother is a house wife. When they came to US, I paid for their travel, medical insurance expenses. My father has pension income in India which is less than $3,000.

    Please let me know if I can claim my parents as dependants in 2012 tax return.

  20. Jan, I think my question was not worded properly. What exchange rate do I use for tax calculations for 2012? If I complete my tax calculation today, can I use today’s exchange rate for converting 2012 income from Indian Rupees to US$? Thanks.

  21. Hi Jan,

    I have a question, if my parents are Mexican citizens but they are not in the US, can I claim them on my US tax return as dependents? They pass all the other tests, but they don’t have SSN or ITIN and they are in Mexico.
    I found this post very useful, thanks a lot!

  22. Hi M Kashif,
    It sounds like you are fine claiming your parents. I can’t tell you about what will affect a citizenship application, but if they have no income to report then they are not doing anything wrong.

  23. Hi

    My parents who received their Green Cards in Feb 2011, live permanently with me in NJ. They are retired, and rely on my financial support 100% (no income in US, or home country, but they do own a house in the home country). Do they still need to file a tax return? If I claim them as dependents on my tax returns, and they do not file their taxes, is that an issue for when they apply for US citizenship?

    Thanks,

  24. Jan, where can I find the exchange rate to use for conversion of INR (Indian Rupees) to US$ for calculating, or rather converting, my Indian income for tax year 2012 into US$. Thank you.

  25. Hi Titus,
    Your parents have to be in the US for 6 months so you won’t be able to claim them in 2012. If they are here for at least 6 months in 2013, you could claim them then.

  26. Both my Mom and Dad are permanent residents. They stayed with us for a month in 2012 and went back to India. Since then they are staying in India but I am financially supporting them for their stuff. I don’t have any proof as I have an Indian account(NRO) and they take money from that account. Can I claim my parents as dependents on my 2013 tax return? Please let me know

  27. Thanks for the clarifications.

    I will go through all the information and seek your guidance if I get confused or lost :-)!

    Thanks and have a great day,
    Sanjay

  28. Hi Sanjay,
    since all of your wage income is in the US–that makes it easier–much easier.
    You will file as a US resident. It’s okay to use Turbo Tax, it’s a good product and if you’ve been using it, it makes it easier, just bring forward your information from last year.

    When you file your return, you’ll need to file also file form 8938–reporting your foreign assets (since you have over $50,000 worth.) That gets filed with your tax return. Here’s a link to that form: http://www.irs.gov/pub/irs-pdf/f8938.pdf

    Additionally, you will file the FBAR which gets filed when you have over $10,000 of assets. That doesn’t go with your tax return, it gets mailed to Detroit,Michigan. Here’s some information on that: http://robergtaxsolutions.com/2012/03/how-to-prepare-the-fbar-form-td-f-90-22-1/

  29. Thanks for your response to my comments.

    Answers to your questions:
    a) I am a Canadian citizen and on TN Status in the US. I guess that means I file as a resident, correct?
    b) One Indian, one Canadian and one US bank accounts have more than $50,000 in them if you count the CD / FD (fixed deposits) attached to those accounts. The others have just over $10K or below (some very nominal – a few hundred dollars).
    c) For all of 2012 I only have W2 US income. In Canada and India I only have interest and/or dividend income, and no employment income at all.

    Please advise based on the above clarifications.

    I will check out the software on this / your site once its up. Could you please advise the timeline.

    I have been using TurboTax for the last so many years while filing taxes in Canada, and hence was thinking it would be good if I could keep filing through that. I understand that you would prefer not to recommend any competing product :-)!, but …..

    Thanks for your help / guidance,
    Sanjay

  30. Hi Sanjay,
    Here’s my first question: what type of Visa do you have? If you’ve got an MJForQ, then you will be a non-resident, that’s a 1040NR–different set of rules.

    Okay, not one of those? Then you can file as a resident. As a resident you report all of your worldwide income.

    You will report your interest income on the Canadian and Indian bank accounts. If you have over $10,000 in those bank accounts, then you’ll need to file an FBAR. If you have over $50,000 in those accounts, then there’s another form.

    If you just have a W2 and no foreign income outside of the interest on your accounts–go ahead and try it yourself. If you’ve got foreign job income or if you have one of the “non-resident” Visas, then you might want some help.

    Now, I always recommend using the tax software on my website–but my new 2012 software isn’t up yet. (More changes still being made.)

    If you need to do the FBAR, here’s a link for more information: http://robergtaxsolutions.com/2012/03/how-to-prepare-the-fbar-form-td-f-90-22-1/

  31. I have worked in the US for whole of 2012 and need to file income tax return.
    I have the following:
    a) 2 bank accounts in Canada (primary & joint holder) – none or nominal interest income since 2004
    b) 3 bank accounts in India (primary & joint holder) – only interest and dividend income for 2012
    c) 2 bank accounts in the US (primary and joint holder in one; only holder in another) – salary and interest income for 2012

    Would it be possible for me to file my taxes myself? What forms would I need to file my taxes, and what information do I need to gather to complete my tax return? What software, e.g. TurboTax, would be best suited if I wanted to file my taxes myself using IRS eFiling (assuming I can efile my taxes)?

    Thanks in advance for your guidance!
    Sanjay

  32. Hi Murali,
    I’m sorry for the loss of your father. Concerning claiming your mother on your tax return, because she is a green card holder, she is automatically considered to be a US resident. And–you’ve meet the requirement of her being in the United States for over 6 months.
    You mentioned that she is going back to India in January, but she met the test of being in the United States for 2012.
    You don’t need any special documents, she has a green card. And her time in the US will be from April 12.

  33. Hi Santosh,
    I’m sorry that your family had an emergency. I hope everything turned out okay.

    I’m assuming that you are filing your return as a US resident since your Visa is L1 and it looks like you’ve been in the US for over 6 months. If that’s the case, yes, you may claim your children as your dependents on your tax return. Use the April 7th date as the date of entry since that’s the date that they came and intended to come and live with you. That was the intent of her entry into the US and that would be the correct date to use.

  34. Hi,
    Thank you for taking on this question and providing great insights!

    I am a US citizen and an only son to my mother (My father recently passed away). My mother, who is an Indian citizen, visited me April 12, 2012 on a visitor’s visa. I decided to apply for my mother’s Green card and she finally got her green card in Nov, 2012. She is leaving back for India on Jan 7, 2013.

    A few questions:
    – Are there any special circumstances for parents changing their US status during their stay in the US from visitor’s visa to green card? Any special documents?
    – She has stayed with me since she arrived earlier this year (i.e. April, 2012). Will the number of days be from April or from the time she got her Green card?

    Wishing you all a happy new year!
    best regards
    murali

  35. I am on L1 Visa and my family is on L2 Visa. They joined me in US on 7th April 2012. Due to some emergency they went to India on 26th May and returned to US on 25th July 2012. Please let me know if I can claim my children as dependents and when filing W7 what date should I mention as date of entry in US.

  36. Hi Minakshi,
    I’m sorry about your father’s illness. I hope he is better. Sadly, you probably won’t qualify for any tax break. In order to claim your father, he would of had to have lived in the US for over six months for the year (or be a US citizen.) I am guessing that is not the case.
    Had he been in the United States, you could potentially claim the medical expenses even if you couldn’t claim him as a dependent if the only problem was that his income was too high. But since he lives in India, and I’m guessing that he is not a US citizen, I’m sorry but you don’t have any tax break there. I’m sorry.

  37. Hi,

    I am an US citizen. My parents live in India. Last month my dad fell sick and we ended up paying $30, 000 in medical expenses in India. Is there any way we can apply for a tax break.

    Thanks in advance!

  38. Hey Chinna,
    That’s an excellent question. Honest answer–I don’t know, I’ve never tried on that one. I would venture it’s worth trying to get the paperwork passed. The IRS can always say no, but if you don’t ask you don’t get.
    The ruling, as I understand it, it the 183 day rule. Has anybody reading this ever tried and what was the result? Thanks for the input.

  39. Hi Amit,
    You’re definitely right about the IRS stressing reporting global income. (The new reporting forms are making me dizzy!) You can deduct the foreign taxes paid, but right now, (with some exceptions) that’s about it. But for now, the foreign mortgage and foreign dependents are still off limits. You can try contacting your congressman or senator, but I’m not seeing a lot of sympathy in that corner right now.

  40. Hi,

    The part you mentioned about Indian parents and the visa types but their VISA was basically a tourist visa–they could could not be in the United States for more than 6 months–hence they could not be considered as US residents is correct.

    But what about parents who got extended beyond 6 months and stayed here for more than 183 days?

  41. These days I am seeing IRS is more stressing on reporting global income. If IRS wants to tax global income then shouldn’t expenses/losses incurred outside of US be allowed for tax deductions?

    Examples:
    1. Mortgage interest paid outside of US
    2. Dependent parents (100% dependent and US tax resident sending money for maintenance)

  42. Hi Haley,
    If your parents have green cards, they qualify to be US residents–but here’s the catch for them–US residents are taxed on their world wide income–so if they are claiming to be US residents, then the have to pay taxes to the United States government on their Indian income–so that could be an issue for you.
    If they don’t want to pay tax on their Indian income, then they would be a dual status alien for 2011–and you wouldn’t be able to claim them.
    Now it you supported them for all of 2012–then you’d have a claim.
    Also, you said that you supported them 100% for the two months they were here since November–you would have had to support them for the entire year (even while they were in India.) So I’m thinking you might not be able to claim them for 2011.

  43. Hi, If my parents immigrated (has green card and SSN) to U.S. in Nov-11 and they lived with me for 2 months in 2012, I provide financial support 100% during the 2 months. Can I claim them as dependent?

  44. Dear Rober, thanks for your help. I suspected such an answer but you clarified it to me and now I am sure. Thanks again

  45. Hi Mike,
    When you are claiming children on your tax return–they either have to be a US citizen or a US resident. (There are rules about living in Canada and Mexico too, but nowhere else.) So, you will not be able to claim your child on your US tax return.
    Now, since you are married–you can file a joint tax return–but you might not want to do that. You would need to make a special election for her to be taxed as a US resident–and then she would be taxed on her world wide income–which might not be to your advantage. But it is an option.
    Even if you file jointly with your wife, you still cannot claim your child.

  46. Hello everybody,
    I live in US since 2008 and have green card. I have a baby born in March 2011 outside USA and who lives with her mother. Niether baby or her mother have any US status. My baby has never been in US and she doen’t have ssn.
    Question is: Can I clam my baby as a dependent since I always send money for her support.
    Thanks

  47. Hi Priyam,
    So the issue here is are your parents US residents? A green card basically guarantees resident alien status. Resident aliens file regular US tax returns and must report their worldwide income so–your parents, as greencard holders must report their Indian income on their US income tax return. There are exclusions for
    income earned outside of the country, but greencard holders do file US tax returns.
    So if your parents are green card holders, they have to file a US tax return. If they are not–they don’t meet the US resident requirements. If they file a US tax return, they can’t file jointly or else you cannot claim them. And remember that their gross income cannot be more than $3650 USD for the year.
    I hope that answers your question.

  48. I and my family arrived in July 2011 on immigrant visa. We all got Greencard within few weeks. Now my parents departed for India after a month (in august). Can I claim them as dependent???

    I read somewhere that parents dont need to stay with the tax filer if the tax filer provides support to them.

    I would really appreciate if you can throw some light on this.
    Thanks in advance.

  49. Thank you. Most of the information can be found in IRS publication 17. The part about claiming a dependent starts on page 25.

    The part about Indian parents and the visa types I unfortunately learned the hard way. I tried submitting some W7 forms for my clients to claim their parents–the parents met all the regular requirements for being claimed by their children–but their VISA was basically a tourist visa–they could could not be in the United States for more than 6 months–hence they could not be considered as US residents. We had to withdraw the application. Basically, your parents would have to have a visa that would allow them to stay in the U.S. in order to claim them on your return.

    Sorry I can’t give you a publication and a page number on that one. But I’m confident about the issue.

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