An ironic misuse
of the word your. As a last ditch effort
to conceal one's own mental failings, often people will claim it was a joke; however, only people more retarded than the initial tard will believe they were actually joking, and also that typing "your retarded" constitutes as a joke.
Jim: No, you mean you're retarded as in you are retarded.
Dick: No bro, I was being ironic, you know? Your retarded.
Jim: Funny... don't have children.