I know someone here will have the answer to this question. Both of my parents live with my husband and I and their combined income is about $1200.00 per month SSI. They also have about 20K in savings.
The IRS rules are very specific about when you can claim a parent as a dependent on your tax filing. It surprises many that the parent does not have to reside with the child claiming the parent for dependency purposes. Whether the parent is living at home with their adult child, in the parent's home or in some type of facility, there is a support requirement in order to claim the dependent exemption. If the parent provides more than half of their support, generally they cannot be claimed. In the original question, the $20k in savings is irrevelant unless it is used to support their household. If they use their $1200 montly for some purpose outside of supporting the household (saving it, investing it, giving gifts, donating to charity, paying debt) those funds are also are not counted as household expenses. Go to IRS.GOV and download the worksheet, fill in the blanks and do the math.
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