(1) According to the IRS, a multiple assistance agreement may be required “if two or more persons, each of whom could claim the dependant without the support test, together provide more than half of the person`s assistance. When this happens, you can agree that any of you who individually provide more than 10% of the person`s support, but only one, can claim that this person is dependent. Each of the others must sign a declaration in which he undertakes not to claim the dependant for this year. When you attach Form 2120 to your return, you acknowledge that you will not pay more than half of the cost of assistance to a person, but that the persons with whom you share the cost will allow you to declare that person as a dependant. Anyone who contributes at least 10% of the dependant`s maintenance costs must provide you with a signed declaration waiving any right to claim the person as a dependant. On the form, you must identify all these people by name, address and social security number. In situations where programs such as social security or other public support funds provide most of the support to dependents, no one can claim that the person is dependent. For example, if two children provide 20% and Social Security 60% of alimony, none of the children can declare their parent as a dependant. (2) Any member of the group who together provided more than half of the person`s support would have been entitled to claim the dependant if he or she had not provided more than half of that support. Often, more than one person is involved in the care and support of an elderly loved one. For example, you help your brother and sister support your mother. Together, three provide more than half (60%) of its support. You provide 25 percent, your sister provides 25 percent, and your brother provides 10 percent. IrS rules state that a person must provide more than half of a person`s support to declare them dependent, but cases like yours where multiple people contribute are treated differently.

Jane Taxpayer and her three brothers each provide 20% of the total support to their mother, whose only income comes from Social Security and who lives in an assisted living facility. At the beginning of each year, they meet and compare tax situations to determine which siblings would receive the greatest overall tax benefit at the federal, state, and local levels by declaring the mother as a dependant. When refunds arrive, the person claiming the exemption gives each of their siblings a cheque for a quarter of the total tax benefit. One of the particularities of the multiple support agreement is that, in order for a person to be considered an eligible parent, the person applying for a dependant exemption must provide more than half of the person`s support, unless “there are exceptions to multiple support agreements, children of divorced or separated parents (or parents who live separately), and abducted children. (Publication 17) To resolve this tax controversy, the IRS litigant proposed a simple solution. The father may waive his right to claim our client`s dependents, which opens the way for our client to claim his dependents through Form 2120, Multiple Support Contract. This form becomes very important at a time when no person provides more than half of a person`s support. As the name suggests, multiple support means that two or more people who could declare the person as dependent, with the exception of the support test, together provide more than half of an addict`s support. LitC was able to obtain an affidavit from the client`s father waiving his right to claim the parents and our client was able to attach the completed form indicating his right to claim the parents. In this case, the multi-support agreement allowed our client to claim relatives. Again, direct parents don`t need to live with you to be considered qualified parents. Whether they live in their own home, in an assisted living facility, or in a nursing home, the cost you cover for their assistance at those locations counts towards the IRS requirement.

Family caregivers give their time and money to support those they love. As tax time approaches, it`s important to understand that you may be able to declare that your care recipient depends on your income taxes and reduce your tax bill. (i) a statement identifying any other person who contributed more than 10% of his or her support and who would have had the right to apply for the person as a dependant without having provided more than half of his or her assistance; and each taxation year, a person may ask the parent to be dependent, provided that he meets the necessary conditions and presents a multiple maintenance contract. Depending on the situation, they may choose to change the person who makes this request each year. (3) A taxpayer who declares the dependant for a fiscal year beginning after December 31, 2001 shall retain the exemptions and shall be prepared to provide the waivers and any other information necessary to support the claim — which may include a return including the names of all contributors (whether or not they are members of the group described in section 152(c)(2)). or not) and the amount contributed by each to support the maintenance creditor claimed […].