can you claim your parents as dependents for health insurance and tax purposes?

My parents are very old and I plan to have them move into my house and help pay for some of their expenses for medication etc. 1)can I put them under my health insurance plan for my employer and how does that work if I wanted to do that? 2)can I file them as my dependents even though they are my parents for tax deduction purposes? Thank you.
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There are two types of dependents as of 2005. Qualifying Child and Qualifying Relative. Your parents are too old for the former, so let's focus on the latter. To be a Qualifying Relative, they: 1) Relationship - They need to be related to you. As a parent, they pass this test. Certain relationships are too distant to qualify unless the person lives with you all year. Parents don't fall into that category. In fact, they NEED NOT LIVE WITH YOU AT ALL in order to pass this test. 2) Gross Income - If they have a gross income of $3,300 (exemption amount) or more, no dice. If their only income is social security, you're OK. If they have other income (pensions, investments, interest), make sure it is less than the exemption amount $3,300 (for 2006). For 2005, it was $3,200. 3) Joint Return - If they "have" to file a joint return, no dice. 4) Support - you must provide over 1/2 of their support. Sounds like you do. Now, here is the fun stuff. If you are single and claim either or both of your parents as dependents and you pay for over 1/2 of the costs of maintaining your parents' residence (whether it is the same residence as you or a totally different place) for the entire year, you can file as Head of Household instead of Single. It sounds like you may have qualified to claim your parents and maybe even claim Head of Household in prior years as well. If so, it isn't too late to change (amend) your tax returns for 2003, 2004, and 2005. You have until April 16th, 2007 to amend 2003 before it goes bye-bye. Every tax day, another year vanishes. Since April 15th falls on Sunday in 2007, tax day is Monday the 16th. You will have to check with your insurance plan to see if dependent parents can be added. My guess is no, but I'm not an insurance expert. Good luck! By the way, all of this can be found at www.irs.gov. Look in Publication 17.
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