Does Mom have to pay income tax?
My mom has alzheimers and has been living in a nursing home since February, 2012. She was a private pay client until her money ran out last July. Now she is on our state's version of Medicaid and she pays almost all of her monthly income to the nursing home and the state picks up the rest of the nursing home cost. She can keep $40 a month. Last year I filed income tax on her behalf. Does she have to file this year? Her yearly income is around $20,000 (hers and my late father's pensions) and virtually all of it goes to the nursing home. She does not collect Social Security. She is not eligible for SS because she is a retired teacher and our state does not allow teachers to collect Social Security. She can't get it through her late husband because he did not live long enough to become eligible for Social Security. So she has the 2 pensions which go to the nursing home.
Nothing keeps you from getting own Social Security benefit
If you’ve worked for at least 10 years and earned a minimum of 40 work credits, you are vested in the Social Security system.
Once you reach age 62, you will be eligible for your own Social Security benefit whether you’re married or not and whether your husband collects Social Security or not.
Your retirement benefit is figured the same way a man’s retirement benefit is figured. It’s based on a percentage of your average monthly wage using a 35-year base of earnings. If you don’t have 35 years of earnings, we must substitute “zero” years to reach the 35-year base.
If you become disabled before your full retirement age, you might qualify for Social Security disability benefits if you’ve worked and paid Social Security taxes in five of the preceding ten years.
If you also get a pension from a job where you didn’t pay Social Security taxes (e.g., a civil service or teacher’s pension), your Social Security benefit might be reduced.
The last bullet explains my mom's situation. It doesn't seem fair, does it? But that's what we deal with in our state.
Deardau, I do believe you will have to file taxes for your mother. You will definitely want to itemize, since almost all money is going to her care at the NH. She shouldn't have any taxes do. I know it is a pain to file, but it is always a pain. I have had to do four returns this year and am burned out on doing them. I'm glad they only come around once a year.
I believe that a CPA would tell you that your mother's income from the two pensions is still taxable even with it all basically going to the nursing home with her on medicaid. I assume she was paying taxes on the income from those pensions before she went on medicaid.