Glossary of Tax Terms: Medical Dependent

I like to say that there are two types of dependents in the tax world: a “dependent dependent” and a “medical dependent.”

A “dependent dependent” is someone who you claim as a dependent on your tax return. (Note that the “dependent dependent” terminology is something I made up; it’s not intended to be a technical term!)

But a person can also be a dependent for medical purposes only … without you actually claiming that person as a dependent on your tax return.

The rules for a person to qualify as a medical dependent are rather simple: the person must live with you all year, and you must provide more than half their support. Notice that there is no income test for a medical dependent. In other words a medical dependent can have any amount of income, so long as they live with you all year and you provide more than half their support.

Medical dependent status is important because you can deduct medical expenses associated with that dependent. You also avoid taxation on the value of the dependent’s medical insurance if that dependent is on your employer-provided insurance policy.

For more glossary terms, click on the “Glossary” link at the top of the page.