Texas Senior Care and Housing Directory
Texas Senior Care and Housing Directory

Caregiver Tax Deductions and Credits

Claiming Your Parent as a Dependent

Figuring Caregiver Tax Deductions and Credits 

Additional Lifestyle Articles

The Internal Revenue Service­ allows family caregivers to claim anyone related by blood, marriage, adoption or even friends as dependents — if both parties meet the IRS requirements. If so, the caregiver can claim the dependent deduction on federal taxes. Bonus for the single taxpayer: Adding a dependent allows you to claim the deduction and bumps you up to head of household — even if your relative lives in a different house. The change in status means your 2017 personal deduction jumps from $6,350 to $9,350.

To Qualify:

Your loved one must be a legal resident of the United States, Mexico or Canada.
Your loved one’s taxable income cannot be greater than that year’s cutoff amount ($4,050 in 2017). 

Taxable income 
includes profits from investments, dividends, capital gains, rental income, interest, withdrawals for regular IRAs, 401Ks and other retirement accounts, earned income including wages, certain royalties, honoraria, severance and sheltered work shop pay.

Tax-exempt income includes nontaxable pensions, Social Security, if income is under $25,000 for a single tax payer or $32,000 if you file jointly, disability payments from the Veterans Affairs, Supplemental Security Income, unemployment benefits, Supplemental Nutrition Assistance Program benefits and small cash gifts.

You pay for more than 50 percent of your loved one’s annual living expenses. This can include: food, clothing, lodging, medical and dental care, recreation, transportation and other necessities.

Two or more people can split their relative’s expenses, but only one person can claim the dependent. The IRS suggests taking turns taking the deduction. Everyone who contributes more than 10 percent must file a Multiple Support Declaration with the IRS waiving the right to claim your mutual loved one as a dependent.

Your parent, if married, doesn't file a joint return or files a joint return only to claim an income tax refund.

You may claim a friend, honorary auntie or unrelated beloved as a dependent. The same rules apply plus one more: The care recipient must have lived with you for at least six months of the year.

Continue - Tips for Caregivers: What the IRS Allows

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