A friend’s elderly Mom lives with her. She has no assets. Friend claims her Mom as a dependent for IRS/tax purposes. Will this affect Mom’s ability to obtain Institutional Medicaid if LTC/SNF is needed?
I can't answer your question specifically but can opine that unless your friend can afford to pay for a lot of caregiving help or the cost of a facility for her Mom (eventually, and maybe sooner rather than later), I'm not sure the dependency tax benefit is more of a financial advantage. Highly doubtful.
Whether or not it will impact her ability to qualify for her state's Medicaid program is a questiion for a Medicaid Planner or certified elder law attorney for her specific state (and all the other information about your friend's financial and tax situation as well).
Medicaid is based on the Moms assets. If all she has is SS and maybe a pension and she is under the income cap, she should be OK. My Mom did not even file taxes way before she started on Medicaid. I don't see where claiming her as a dependent hhas anything to do with her. But like said, once she is in a NH on Medicaid, she cannot be claimed anymore.
I think this is a question for an accountant because I’m not sure how Medicaid will look at it, I do think there was a question on the application about whether or not Mom was a dependent but that also may vary state to state. I assumed when you claim someone as a dependent it means you are supporting them financially and when a person applies for and collects Medicaid it’s because they can’t support themselves and aren’t being supported financially so it’s one or the other. That said I’m well aware that in reality State support and Medicaid don’t cut it when it comes to support and when they live with you or vise versa you end up absorbing a lot of expense so it seems legit one shouldn’t affect the other as long as your in the same dwelling. Also Medicaid is medical support over and above Medicare so basically the supplemental and medical insurance doesn’t affect your ability to claim a dependent so maybe as long as the patient isn’t collecting other state assistance like food and shelter? Again it’s a question for an accountant in your state I think.
It should not come in to play if mom has to apply for Medicaid nursing home bed since only the income and the assets (bank accts, etc) for her (and her spouse, if living) are considered.
When you say mom has no assets, are you referring to things like a house or other property? More than likely she has a bank account for her SSA check or other retirement to be deposited. That bank account is a countable asset/resource. Your friend should not be putting any money in that acct to pay for things mom needs because it 'could' be considered income at the time a Medicaid application is done. As well, mom's check shouldn't be going in to her child's account either because technically mom has access to all the money and visa versa.
If child claims her as dependent, child is telling IRS they pay for more than 50% of mom's expenses: rent, food, medical, etc. Assuming that your friend has figured that all out and can show they pay for more than 50% of her living expenses. At the time mom enters a NH, claiming her would have to end because the state would be supporting mom if approved for Medicaid.
With each state being a little different on the NH medicaid programs, she could call the local office and ask for Medicaid for aged and disabled to ask the specific question about mom being claimed on IRS forms to be sure how it works in her state.
Whether or not it will impact her ability to qualify for her state's Medicaid program is a questiion for a Medicaid Planner or certified elder law attorney for her specific state (and all the other information about your friend's financial and tax situation as well).
When you say mom has no assets, are you referring to things like a house or other property? More than likely she has a bank account for her SSA check or other retirement to be deposited. That bank account is a countable asset/resource. Your friend should not be putting any money in that acct to pay for things mom needs because it 'could' be considered income at the time a Medicaid application is done. As well, mom's check shouldn't be going in to her child's account either because technically mom has access to all the money and visa versa.
If child claims her as dependent, child is telling IRS they pay for more than 50% of mom's expenses: rent, food, medical, etc. Assuming that your friend has figured that all out and can show they pay for more than 50% of her living expenses. At the time mom enters a NH, claiming her would have to end because the state would be supporting mom if approved for Medicaid.
With each state being a little different on the NH medicaid programs, she could call the local office and ask for Medicaid for aged and disabled to ask the specific question about mom being claimed on IRS forms to be sure how it works in her state.