Even if a taxpayer does not provide more than half the support of another person, the taxpayer may still qualify for the deduction if he contributes more than ten percent of a person’s support.
Specific Details
You and your two sisters support your elderly mother. You contribute 40 percent, Ann contributes 35 percent, and Betty contributes 5 percent (your mother pays 20 percent of her own support). Since you and your sisters contribute more than half of your mother’s support, a multiple support agreement is warranted. However, only you and Ann qualify since you each contribute more than 10 percent of the support. You and Ann can decide who claims the exemption, as it does not matter that you paid more than Ann.
Potential Savings
If you are in a combined (federal, self-employment, and state) tax bracket of 30%, you could reduce your taxes up to $300 for every $1,000 of income reduction by contributing more than ten percent of a person’s support to claim a personal exemption deduction.