To cut down on costs, many parents have been moving in with their adult children. And as children start to cover healthcare and living costs for their parents, many are wondering when they can start claiming their parents as dependents.

AARP reported, that in 2008 there were 4.05 million parents living with an adult child, so it’s not uncommon for parents to move in with their children (and probably vice versa).

“If you are assuming the day-to-day care and financial support of a parent and that parent qualifies as a dependent, you may be eligible to claim additional tax benefits,” said John Dundon, EA, an enrolled agent tax expert based in Englewood, CO.  “In fact, your parents can live in their own home or in a retirement community and still be legally claimed as dependents – so long as they meet IRS’s requirements for a dependent.”

There are a lot of things that must be met before you can start claiming your parents as dependents.

Dundon says the following criteria must be met:

  • He or she must be legally recognized as your parent, either biologically or by adoption.
  • For 2016, all dependent relatives must have less than $4,050 in gross taxable income to qualify.
  • He or she must receive more than 50 percent of all financial support from you.
  • Your parent must be a U.S. citizen or a resident of Canada or Mexico.
  • He or she must not be required to file a federal income tax return. If your parent is under 65 and filing Single, they must file a return if their income is at least $10,350; filing Single and over 65, at least $11,900; Married Filing Jointly and under 65, at least $20,700; Married Filing Jointly and over 65, at least $21,950.
  • He or she can’t file a joint return with a spouse for any purpose other than to receive a tax refund.

In order to claim both of your parents, they both have to meet the above criteria.

Dundon says that if you pay for your parent’s medical care, you may be able to deduct those expenses as itemized deductions. Even if your parent doesn’t meet the listed income requirement for dependents, Dundon says, medical expenses may still be claimed if you provide 50 percent of their support.

There’s also a non-refundable tax credit available to taxpayers who pay for the care of a qualifying individual and meet certain requirements called the Child and Development Care Credit. Parents who qualify must be physically or mentally unable to care for themselves, Dundon says.

Dundon says, Earned income and work-related expenses are necessary to qualify, meaning the care must have been provided while you were either working or looking for work. You’ll need to give the IRS the care provider’s Social Security number and other identifying information. If you are married but file a separate return from your spouse, you may not claim this credit, he says.