Missionaries and Taxes

[MorningStar]

Our son is working on his mission papers and just turned 19, so the state said he needs to reapply for health benefits. They said if he's still going to be a dependent in 2023, we can claim him on our application, but you can't claim a missionary as a dependent, can you? 

[rpn]

You can if you are  paying more than 50% of his support.

[ksfisher]

1 hour ago, MorningStar said:

you can't claim a missionary as a dependent, can you? 

I am.

[Rain]

From the IRS

Quote

Question

Is there an age limit on claiming my child as a dependent?

Answer

To claim your child as your dependent, your child must meet either the qualifying child test or the qualifying relative test:

• To meet the qualifying child test, your child must be younger than you and either younger than 19 years old or be a "student" younger than 24 years old as of the end of the calendar year.
• There's no age limit if your child is "permanently and totally disabled" or meets the qualifying relative test.

In addition to meeting the qualifying child or qualifying relative test, you can claim that person as a dependent only if these three tests are met:

1. Dependent taxpayer test
2. Citizen or resident test, and
3. Joint return test

Here is an exercise that takes you through if he qualifies or not. Note: it does NOT take 15 minutes as the site says.  It was pretty quick.

It's important to know that the donations to the church are legally considered donations, not payments for him being on a mission. I know people have made different decisions on how to do their taxes based on that.   

 

[JAHS]

According to Turbo Tax to claim your child as a dependent (exemption), you must be able to answer "yes" to all of the following questions:

1. Are they related to you? The child can be your son, daughter, stepchild, eligible foster child, brother, sister, half brother, half sister, stepbrother, stepsister, adopted child or an offspring of any of them.
2. Do they meet the age requirement? Your child must be under age 19 or, if a full-time student, under age 24. There is no age limit if your child is permanently and totally disabled.
3. Do they live with you? Your child must live with you for more than half the year, but several exceptions apply.
4. Do you financially support them? Your child may have a job, but that job cannot provide more than half of her support.
5. Are you the only person claiming them? This requirement commonly applies to children of divorced parents. Here you must use the “tie breaker rules,” which are found in IRS Publication 501. These rules establish income, parentage and residency requirements for claiming a child.

If you can answer yes to all, then you can claim them as dependent on your tax return.
----------------------------------------

There has been no specific direction about how some of these criteria apply for missionary children, but here are some possibilities:
1. Yes
2. Yes, if after they turn 19 they can be considered a full-time student, meaning the Church is considered an educational institution
3. They may not live with you for the whole tax year but the "exceptions" might apply
4. Yes, if you make the monthly payments for their support and don't claim that money as a charitable contribution.
5. Yes
I have never heard of anyone getting in a lot of trouble for claiming their missionary child as a dependent.

[Benjamin McGuire]

You might look here.

[Dario_M]

I have heard that is quite expensive to go on a mission. What whas the price you need pay to the church per year again?? 5000 dollar or so? Offcourse after that the church will take care of you. And food and where you will live. But still.... they need to work their butts of. And they don't get payed for that. 

Do all the missionaries also need to pay for their own fly fickets? 

Edited February 24, 2023 by Dario_M

[gopher]

In addition to finding out if you can declare him as a dependent, you might look into creating multiple shell LLCs to hide the money he's saved up for his mission.  Pretty sure nothing bad will happen.

Just kidding.  I'm still having a hard time getting upset about that story.

[Danzo]

For children with missionaries it would depend on when they left on the mission, when they get back from their mission

If they were 18 and left on their mission after july 1st, then you could claim them for that year

If they were under 23 and Left after July 1st and they were a full time student for any part of five months, you could probably claim them.

Likewise if they were under 23 and came home from their mission before july 1st and they were a full time student and least five months of the year you could claim them. 

if they were on their mission the entire year, or most of the year,  I don't let my clients claim them as dependents because you have to provide half of the kids support and contributions to the mission fund are charitable deductions, not support.

 

If they were over 18 and were not students, and left or returned partway through the year, then you would need to know how much money the kid made during the year. If they made more than $4,400.00 then you couldn't claim them as a dependent.

If they made less than that amount and you provided over half of their support, you could claim them as dependents. 

 

[Rain]

7 hours ago, Danzo said:

For children with missionaries it would depend on when they left on the mission, when they get back from their mission

If they were 18 and left on their mission after july 1st, then you could claim them for that year

If they were under 23 and Left after July 1st and they were a full time student for any part of five months, you could probably claim them.

Likewise if they were under 23 and came home from their mission before july 1st and they were a full time student and least five months of the year you could claim them. 

if they were on their mission the entire year, or most of the year,  I don't let my clients claim them as dependents because you have to provide half of the kids support and contributions to the mission fund are charitable deductions, not support.

 

If they were over 18 and were not students, and left or returned partway through the year, then you would need to know how much money the kid made during the year. If they made more than $4,400.00 then you couldn't claim them as a dependent.

If they made less than that amount and you provided over half of their support, you could claim them as dependents. 

 

I love that you show there are different situations.  There was a woman on my missionary mom's board who kept declaring things like "My husband is an accountant and says you can", but she didn't have any idea what their situations were.  

[Danzo]

46 minutes ago, Rain said:

I love that you show there are different situations.  There was a woman on my missionary mom's board who kept declaring things like "My husband is an accountant and says you can", but she didn't have any idea what their situations were.  

If you ever have a question about tax law, "It Depends" and "maybe" are almost always the correct response.

[Teancum]

On 2/23/2023 at 3:19 PM, MorningStar said:

Our son is working on his mission papers and just turned 19, so the state said he needs to reapply for health benefits. They said if he's still going to be a dependent in 2023, we can claim him on our application, but you can't claim a missionary as a dependent, can you? 

Here you go from IRS.  Also you cannot claim the child as a dependent and also claim as a charitable donation the amounts you are donating to the church missionary fund.  The latter likely is your best answer.

 

Table 5. Overview of the Rules for Claiming a Dependent

	This table is only an overview of the rules. For details, see the rest of this publication.
You can't claim any dependents if you, or your spouse if filing jointly, could be claimed as a dependent by another taxpayer, unless that taxpayer files a return only to claim a refund of withheld income tax or estimated tax paid. You can't claim a married person who files a joint return as a dependent unless that joint return is filed only to claim a refund of withheld income tax or estimated tax paid. You can't claim a person as a dependent unless that person is a U.S. citizen, a U.S. resident alien, a U.S. national, or a resident of Canada or Mexico.1 You can't claim a person as a dependent unless that person is your qualifying child or qualifying relative.
Tests To Be a Qualifying Child		Tests To Be a Qualifying Relative
The child must be your son, daughter, stepchild, foster child, brother, sister, half brother, half sister, stepbrother, or stepsister, or a descendant of any of them. The child must be (a) under age 19 at the end of the year and younger than you (or your spouse if filing jointly); (b) under age 24 at the end of the year, a student, and younger than you (or your spouse if filing jointly); or (c) any age if permanently and totally disabled. The child must have lived with you for more than half of the year.2 The child must not have provided more than half of the child’s own support for the year. The child must not be filing a joint return for the year (unless that joint return is filed only to claim a refund of withheld income tax or estimated tax paid). If the child meets the rules to be a qualifying child of more than one person, generally only one person can actually treat the child as a qualifying child. See Qualifying Child of More Than One Person, later, to find out which person is the person entitled to claim the child as a qualifying child.		The person can't be your qualifying child or the qualifying child of any other taxpayer. The person either (a) must be related to you in one of the ways listed under Relatives who don't have to live with you, or (b) must live with you all year as a member of your household2 (and your relationship must not violate local law). The person's gross income for the year must be less than $4,400.3 You must provide more than half of the person's total support for the year.4
1 There is an exception for certain adopted children.
2 There are exceptions for temporary absences, children who were born or died during the year, children who were adopted or lawfully placed for adoption during the year, children who are eligible foster children placed during the year, children of divorced or separated parents (or parents who live apart), and kidnapped children.
3 There is an exception if the person is disabled and has income from a sheltered workshop.
4 There are exceptions for multiple support agreements, children of divorced or separated parents (or parents who live apart), and kidnapped children.

[Teancum]

On 2/23/2023 at 4:30 PM, rpn said:

You can if you are  paying more than 50% of his support.

No it takes more than that.  See above.

Edited February 25, 2023 by Teancum

[Teancum]

On 2/23/2023 at 4:33 PM, ksfisher said:

I am.

You likely should not be.  And you cannot claim them as a dependent and take a charitable contribution for what you give to the missionary fund.

[Rain]

7 hours ago, Teancum said:

Here you go from IRS.  Also you cannot claim the child as a dependent and also claim as a charitable donation the amounts you are donating to the church missionary fund.  The latter likely is your best answer.

 

Table 5. Overview of the Rules for Claiming a Dependent

	This table is only an overview of the rules. For details, see the rest of this publication.
You can't claim any dependents if you, or your spouse if filing jointly, could be claimed as a dependent by another taxpayer, unless that taxpayer files a return only to claim a refund of withheld income tax or estimated tax paid. You can't claim a married person who files a joint return as a dependent unless that joint return is filed only to claim a refund of withheld income tax or estimated tax paid. You can't claim a person as a dependent unless that person is a U.S. citizen, a U.S. resident alien, a U.S. national, or a resident of Canada or Mexico.1 You can't claim a person as a dependent unless that person is your qualifying child or qualifying relative.
Tests To Be a Qualifying Child		Tests To Be a Qualifying Relative
The child must be your son, daughter, stepchild, foster child, brother, sister, half brother, half sister, stepbrother, or stepsister, or a descendant of any of them. The child must be (a) under age 19 at the end of the year and younger than you (or your spouse if filing jointly); (b) under age 24 at the end of the year, a student, and younger than you (or your spouse if filing jointly); or (c) any age if permanently and totally disabled. The child must have lived with you for more than half of the year.2 The child must not have provided more than half of the child’s own support for the year. The child must not be filing a joint return for the year (unless that joint return is filed only to claim a refund of withheld income tax or estimated tax paid). If the child meets the rules to be a qualifying child of more than one person, generally only one person can actually treat the child as a qualifying child. See Qualifying Child of More Than One Person, later, to find out which person is the person entitled to claim the child as a qualifying child.		The person can't be your qualifying child or the qualifying child of any other taxpayer. The person either (a) must be related to you in one of the ways listed under Relatives who don't have to live with you, or (b) must live with you all year as a member of your household2 (and your relationship must not violate local law). The person's gross income for the year must be less than $4,400.3 You must provide more than half of the person's total support for the year.4
1 There is an exception for certain adopted children.
2 There are exceptions for temporary absences, children who were born or died during the year, children who were adopted or lawfully placed for adoption during the year, children who are eligible foster children placed during the year, children of divorced or separated parents (or parents who live apart), and kidnapped children.
3 There is an exception if the person is disabled and has income from a sheltered workshop.
4 There are exceptions for multiple support agreements, children of divorced or separated parents (or parents who live apart), and kidnapped children.

I noticed when looking at this before I answered that a qualifying child had to be younger that you.  I laughed at that.  Now that you have answered I realize that you could have a step child older than you.  So what if your stepchild is older than you, but your spouse is obviously older than the child.  Does the child still qualify if they only qualify under one of the joint couple?

[Calm]

1 hour ago, Rain said:

I noticed when looking at this before I answered that a qualifying child had to be younger that you.  I laughed at that.  Now that you have answered I realize that you could have a step child older than you.  So what if your stepchild is older than you, but your spouse is obviously older than the child.  Does the child still qualify if they only qualify under one of the joint couple?

Yes, in parentheses it says “or your spouse if filing jointly”.

There is one possibility where both parents are younger (I wonder if there is anywhere you can adopt someone older than you…not in Utah though), the ‘kid’ is the child of a previous spouse who brought the child with them into the marriage with a much younger spouse and then either died or abandoned their child along with their latest spouse, who then remarries someone their own age.  So a person could have two step parents younger than themselves, correct?  
 

I would really hope this never happens with minors…guessing there were quite a few in the past in the larger polygamous families.  It is quite different even if weird if both child and new spouse are adults.  A 90 year old with a 70 year old child remarries and now has a 65 year old spouse. 
 

That could get annoying if the spouse had control of the family fortune.  Highly unlikely to outlive them to inherit.

Edited February 26, 2023 by Calm

[Rain]

1 hour ago, Calm said:

Yes, in parentheses it says “or your spouse if filing jointly”.

Skimmed that too fast! 😅

1 hour ago, Calm said:

There is one possibility where both parents are younger (I wonder if there is anywhere you can adopt someone older than you…not in Utah though), the ‘kid’ is the child of a previous spouse who brought the child with them into the marriage with a much younger spouse and then either died or abandoned their child along with their latest spouse, who then remarries someone their own age.  So a person could have two step parents younger than themselves, correct?  
 

I would really hope this never happens with minors…guessing there were quite a few in the past in the larger polygamous families.  It is quite different even if weird if both child and new spouse are adults.  A 90 year old with a 70 year old child remarries and now has a 65 year old spouse. 
 

That could get annoying if the spouse had control of the family fortune.  Highly unlikely to outlive them to inherit.

 

[Calm]

10 hours ago, Rain said:

Skimmed that too fast! 😅

 

I figured since I do it all the time….