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Can live-in helper be a dependent?

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in Small Business Tax,Small Business Tax Deduction Strategies

Q. We pay a live-in to help my elderly mom with daily living. Can we claim her as a dependent? M.B., Powat, Calif.

A. Probably not. Although a full-time resident in your home doesn’t have to be a blood relative to qualify as your dependent, you still must provide that person with more than half of her annual support. Unfortunately, the amounts paid to her for caring for your mother are treated as wages, not support, but you may count the value of lodging you provide. Assuming this is the caretaker’s full-time job, it seems unlikely you will pass the half-support test. Also, under the “nanny tax rules,” you’re treated as a household employer for wages above an annual threshold.

Tip: The nanny tax threshold for 2015 is $1,900.

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