Are You Eligible for the Family Caregiver Tax Credit?Caregiver Tax Credit

Caregivers provide a variety of services for senior citizens every year.  Many times these caregivers are taking care of their parents or loved ones and often will pay for medical expenses with their money.  If you are a caregiver, you might be eligible to receive certain caretaker tax breaks and deductions.  These deductions can help defray the cost of taking care of your loved one and will allow you to give them the best care possible.

Claim Them as Dependents

The first thing that you will want to do is see if you can claim your loved one as a dependent.  There are a few ways that you can see if you meet the qualifications to claim them as dependents:

  • They are a relative that either lives with you or in their home
  • They have an income that is less than $3,950 before Social Security benefits
  • You pay for more than half of their medical expenses
  • They are a non-relative who has lived with you for more than six months

If you can claim your loved one as a dependent, you will be able to take a tax deduction on your taxable income that tax year.

Claim Medical Expenses

If you can claim your relative as a dependent, you might also be able to claim a tax benefit for their medical costs. Medical costs, as defined by the IRS, are the costs of diagnosis, cure, mitigation, treatment, or prevention of disease, and the costs for treatments.  To claim these medical expenses, you need to meet two requirements:

  1. You must be paying for more than 50% of their total medical expenses; and
  2. Your total represented medical cost is more than 10 percent of your adjusted gross income.

If your loved one is 65 or older that number moves from 10% to 7.5%.  If you meet those two requirements, you can deduct the difference of the medical expenses from the total 10% or 7.5% of your adjusted gross income.

Decide Who Gets the Deductions

If you and other relatives are providing care for your loved one, you will have to decide who can receive the tax benefits.  Only one person can claim the parent or loved one as a dependent and file for the tax exemptions.  You will have to decide before taxes which of you will file the dependent claim.  That person will then need to file a Form 2120, Multiple Support Declaration, as well as have all the others who provide care sign the form saying they will not claim the relative as a dependent.

Check Your State

Some states offer extra deductions for caregivers.  These deductions help to lower the amount of income tax that the family owes.  Not every state offers these deductions so you will have to check with your state’s revenue department to find out more information.

Taking care of a parent or loved one can be a daunting task.  You want to make sure that they are getting the proper care, and that can be expensive.  Sometimes you don’t have the money to give them the medical care that they need.  Caregiver tax deductions and breaks can help you pay for the health care that your loved ones deserve.

Senior Advisor's knowledgeable writers blog about senior care services, trends and more.

2 Comments

  1. Exhausted in VA October 1, 2018 Reply

    This is great information! I have had to care for my former spouse for the passed 12 years and did not know I could claim him as a dependent. He collects SS and that is his only income. It’s enough to pay for his medical and personal expenses but he has nothing left to contribute to the household.

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