How To File Tax Returns for an Incapacitated or Mentally Incompetent Parent

There may come a time when your parent needs you to care for them as much as you once needed them to take care of you. This might involve helping them navigate daily tasks or tending to their finances if they become incapacitated or mentally incompetent and can't do so themselves. And if you’re taking care of a parent’s finances, you may also need to file a tax return on their behalf.

Can You File a Tax Return for a Parent?

You can file a tax return for one of your parents if they have given you IRS power of attorney by filling out Form 2848 or if you are their conservator. When a parent decides to give you IRS power of attorney, they can limit what you are allowed to do. For example, they may only permit you to sign and file the return, but not do anything else they would normally do.

Requirements for Filing Someone Else’s Return

You’ll need authorization to sign and file your parent’s tax return. The IRS recognizes a few types of third-party authorizations.

Power of Attorney

An IRS power of attorney allows you to sign your parent’s tax return for them, as well as negotiate and argue issues with the agency on their behalf.

To give you permission to sign the return, you and your parent will need to submit Form 2848, also known as the Power of Attorney and Declaration of Representative. Be sure to enter the letter "f" for "family member" in the designation column in Part II and check the "Sign a return" checkbox in Part I, Box 5. The form must be filed with the IRS and should be included with the tax return as well.

You can submit Form 2848 by mail or fax. You can also check a box on the form to request that the IRS send you copies of all letters, communications, and notices regarding your parent. The power of attorney remains in effect until it is revoked by you or your parent.

If your parent is not mentally capable, they will not be legally permitted to sign and date any legal forms, including Form 2848. But you may have another option.

If You Have Conservatorship

Submitting Form 2848 shouldn’t be necessary if you have been assigned as a conservator over your parent by a court.

“As part of the conservatorship, [the child] should have filed Form 56 with the IRS to inform the agency of their fiduciary relationship with their parent,” Logan Allec, CPA and owner of Choice Tax Relief in Santa Clarita, California, told The Balance. “If a child does have an approved conservatorship and has filed Form 56 with the IRS, they can sign their own name on their parent's Form 1040 in the box where their parent would usually sign. They do not have to file a Form 2848.”

Third-Party Designee

Your parent also can give you permission to communicate with the IRS on their behalf by completing the Third-Party Designee section of their tax return. That involves checking a box and providing your name, which is why this option is often referred to as “checkbox authority.”  

However, that’s all this option authorizes. It doesn’t allow you to sign the return for an incompetent parent. This authorization expires one year after the due date for the tax return.

Tax Information Authorization

This authorization allows you to receive and review your parent’s tax information from previous returns, which you might need to accurately prepare a current year’s tax return. It doesn’t permit you to sign their tax return on their behalf. You can complete the authorization in a Tax Pro account or file Form 8821 by mail or fax. This authorization stays in effect until your parent revokes it.

Other Options

The IRS can offer help if you find yourself feeling challenged by these options and how to get them right. The Tax Counseling for the Elderly (TCE) program is available if your parent is age 60 or older. TCE is manned by volunteers who provide free help in preparing tax returns from Jan. 1 through April 15 each year, assuming your parent is mobile enough and cognizant enough to meet with a representative.

The IRS also offers the Volunteer Income Tax Assistance (VITA) program specifically designed to help taxpayers with disabilities. Your parent will also qualify if they have income of $58,000 or less for the year or if English is their second language.

Can You Claim Your Parent as a Dependent?

You might be able to claim your parent as a dependent even if they don’t live with you. However, you must pay for more than half their total support for the year. For the 2021 tax year, they cannot have a gross income of $4,300 or more.

Your parent may still need to file a tax return even if you can claim them as your dependent. Whether they need to file a tax return depends on their earned and unearned income. The tax filing requirement is also based on whether your parent has reached age 65, is married, or is blind. Assuming your parent is single and age 65 or older, they typically would only need to file a tax return as your dependent if their unearned income was more than $2,800 in 2021.

The Bottom Line

The simplest and most efficient way to prepare, sign, and file your parent’s tax return if you don't have conservatorship is to submit Form 2848 with the IRS. Seek help from the Taxpayer Advocate Service or a tax professional if your parent can't sign the form and you don't have conservatorship. A tax professional may also be able to help you claim your parent as a dependent, which can help you lower your overall tax bill.

Frequently Asked Questions (FAQs)

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