To qualify for caregiver tax deductions and credits the person
you are caring for must be a spouse, dependent, or qualifying
relative, as well as a United States citizen or resident of the
U.S., Canada, or Mexico. A qualifying relative includes a
parent, stepparent, father-in-law or mother-in-law, or any other
person who lived with you all year as a member of your
If your parent was your dependent either at
the time the medical services were provided or at the time you
paid the expenses, you may claim a deduction for the portion of
their expenses that you paid. You can include medical expenses
you paid for an individual that would have been your dependent
he or she received gross income of $4,050 or more in 2016,
he or she filed a joint return for the year, or
you, or your spouse if filing jointly, could be claimed as a
dependent on someone else's return.
Deduct the medical
Schedule A (Form 1040)
, Itemized Deductions. Reduce the
total of all allowable medical expenses by 10% of your adjusted
gross income, 7.5% if either you or your spouse is age 65 or
Itemized Deduction for 2016 Medical Expenses
Families caring for elderly parents and relatives typically pay
thousands of dollars per year in healthcare and other care giving
costs, plus the missed work and income opportunities that come from
devoting so much time and energy to care giving. But there
are some tax deductions that can help you recoup at least some of
the costs. Hereís how.Claim your
parent as a dependent.
You can claim your elderly parent as
a dependent and shave a few thousand dollars off your taxable
income. But the situation has to meet a few requirements to
qualify. These include:
The parent has to make less than a
certain amount per year in gross income. That amount rises every
year; for the 2016 tax year, itís $3,950. Usually, that doesnít
include Social Security.
You must pay for more than 50% of the
parentís total living costs each year.
You must be the only person
who can claim the parent as a dependent. The parent canít be claimed
The parent canít file a joint tax return with a spouse or
You cannot be declared as a dependent on anyone elseís
tax return.Write off their daily care expenses.
Even if your parent doesnít qualify as a dependent, you can still
write off a percentage of costs that you paid to a care provider.
The percentage you can write off is based on your own adjusted gross
You can write off expenses for someone who is
ďphysically or mentally incapable of self-careĒ and lived with you
for half the year or more. This would typically be someone who
didnít qualify as your dependent because they make too much in
income, they file a joint return, or they could have been claimed as
a dependent on another personís tax return.
This is usually
for people who pay professional care providers. If the person who
providers care is your spouse, a dependent you claim on your taxes,
or a child younger than 19, for example, you canít claim this
deduction. Write off their medical bills.
If the medical bills you pay exceed a certain percentage of your
adjusted gross income, you can deduct them on your federal taxes.
This doesnít just mean your parentís medical bills, but also your
own and the rest of your familyís. This includes the costs of
diagnostic devices and medical equipment and supplies, as well as
medication, surgery, dental costs, and doctorís appointments.
If you paid for part of a parentís care in a multiple support
agreement with other family members, you may also be able to write
off medical expenses you paid. A medical support agreement allows
two or more people to pay for more than half of another personís
expenses, including medical expenses.
Under these agreements, no
single person pays more than half of these costs. Under these
agreements, you may be able to deduct some or all of the expenses
you pay as part of your medical expenses, depending on the way the
costs are shared. Deduct their LTC insurance.
Long-term care insurance premiums can also qualify as tax
deductions. The IRS requires that the policy meet a few
stipulations, though. These include:
The policy has to be
There canít be a cash surrender value.
The policy canít cover expenses already covered under Medicare.
The policy provides refunds only for death, surrender, or contract cancellation.
Policy dividends are used only to increase the
benefits available or decrease the cost of future premiums.
Ask about state-specific deductions.
In Texas and
in other states, there are also tax deductions that you can take for
providing care. They vary by state, so the best person to talk to is
a tax preparer. As of 2013, 28 states let you deduct a certain
percentage of the federal caregiver tax credit from your state tax
If youíre not sure whether or not you qualify for
tax deductions for the care you provide an elderly parent, check
with a professional tax return preparer. Every situation in every
state is different, and it can be invaluable to get feedback on your
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