My Mother in-law owns and operates a trailer park in California. She lives on the property and is single. Recently, she took in her 2 daughters who are adults and both are 100% disabled, the daughters both draw social security and Medicare. The daughters do not pay rent. FYI: My Mother in-law does not draw medicare.
Can my mother in-law claim her daughters a dependents and take a deduction? Her bookkeeper says no. I think this is wrong, but I thought I would ask..
Thanks

I think she needs to check with another book keeper. She is head of household and they are disabled. I just did my taxes with my son and the tax lady did my son's social security disability so that he could receive the ESI rebate and she did mine as head of household.
My son is 20 and 18 is legal age in my state.

Yes, she may qualify as head of household:
a. She is single; b. she pays more than half the cost of keeping a house;
c. a qualifying person lives with her.

Read Read: Your U.S. Tax Return: Requirements for claiming a dependent (http://taxipay.blogspot.com/2008/03/requirements-for-claiming-dependent.html)

I am on social security disability. My son who is 21 and a full time student still lives with me but does not work. Can I file a tax return and claim him as a dependent and my status as Head of household?

pyroburke:

Even though Mukata's previous answer is now 4 years old it is still accurate. You may file as HoH and claim your son as a dependent if all the following are true:

1) You are single
2) You paid for more than half the upkeep of your home
3) A qualifying child or relative lived with you at least half the year. In this case your son is a "qualifying child" since he lives with you, is a full time student, is under age 24, and (presumably) provides less than half his own upkeep.