I need to know if I can claim my parents on this years taxes? They spoke to an H&R Block rep, and the rep said they don't have to file taxes. All they have is Social Security and their 401K.:confused:

You can claim your parents if they are U.S. person, you provided more than half of their support and they (each one) did not earn more than $3500 in 2008.
401K disbursement is income.

I agree with MukatA.

The 401K disbursement will probably make them ineligible to be claimed as your dependents.