Credits for other dependents ($500/parent dependent).

[The Real Halloween]

TP provided more than half of the parents support and parents lived with TP for more than half of the year. However, parents have the following in 2021:
1. Parents had gross income of $4,300 or more,
2. Parents filed a joint return.

Can TP claim credits for other dependents of $1,000 on his return? I understand TP can claim dependent care credit (form 2441) even with the above items #1 and 2 as parents are qualifying persons for dependent care credit.

Please let me have your comments and thoughts on this. Thank you in advance for your time and assistance!

[TaxGuyBill]

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@The Real Halloween wrote:

1. Parents had gross income of $4,300 or more,
2. Parents filed a joint return.

Can TP claim credits for other dependents of $1,000 on his return?

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$4300 combined?  Each?  You aren't counting non-taxable Social Security, right?

Is the Joint return ONLY claiming a refund of withheld taxes?

[The Real Halloween]

@TaxGuyBill.  Parents' gross income is more than $4,300 combined and parents are filing joint return not to claim refund of withholding taxes.  Thanks again for your assistance.

[TaxGuyBill]

They are not dependents. 

The Joint return disqualifies it (unless it was only for a refund of withheld taxes).

And if either one of the had over $4300 that would also disqualify that person from being a dependent.

[The Real Halloween]

Parents still qualify as dependents even they have income over $4,300 combined or file a joint return (non claiming refund return) under the Dependent care expenses (form 2441) and medical expenses (Schedule A).  These two exceptions are not available for credits for other dependents.  Is my understanding from your comments correct?

[qbteachmt]

"as parents are qualifying persons for dependent care credit."

Your taxpayer pays for care for the two adults living with them?

Have you used the tax wizard:

https://www.irs.gov/help/ita/am-i-eligible-to-claim-the-child-and-dependent-care-credit

[TaxGuyBill · Accepted solution]

Correct. 

They are not dependents, but the rules for medical expenses and the Dependent Care Credit have some exceptions that allow things for a non-dependent.

[The Real Halloween]

@TaxGuyBill Thanks again for your time and help.

[The Real Halloween]

How to instruct PTO the following:

List the parents as dependents on page 1 of form 1040 but TP is not eligible for credits for other dependents. Need to list parents as dependents in order to claim dependent care expenses credits form 2441.

Thanks for your time and guidance on this.

[PhoebeRoberts]

You can enter their information directly in the Child and Dependent Care Expenses screen. It's possible that this return won't pass e-file specs, and will need to be filed on paper.