Texas Senior Care and Housing Directory
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Caregiver Tax Deductions and Credits

Claiming Your Parent as a Dependent

Figuring Caregiver Tax Deductions and Credits 

Additional Lifestyle Articles

Caring for a loved one could make you eligible for deductions and tax credits. The Internal Revenue Service≠ allows family caregivers to claim anyone related by blood, marriage, adoption or even friends as dependents ó if both parties meet the IRS requirements. You can claim a portion of up to $3,000 in caregiving costs for one person and up to $6,000 for two or more. Oddly, given the name, this tax credit does not require that your loved one qualify as your dependent under the IRS definition of the term.

What Can I Deduct as a Caregiver?

Allowable deductions for caregivers can include things such as eyeglasses, medical costs such as bandages, hearing aids and prescription medication costs, as well as money spent toward transportation to and from appointments, modifications made to your home or vehicle for safety needs, and adult day care or in-home care services. If you use a flexible spending account or health savings account to pay for these, you may not be able to also deduct expenses on your tax return.

Speaking to a tax professional is important when determining dependent and deduction eligibility in any given tax year. There are many nuances within the tax code that may fluctuate, including how various deductions interact with each other and what you are allowed to deduct based on how you pay for it. The IRS audits a small percentage of tax returns, but you donít want yours to be oneóespecially if you werenít careful during the preparation.

Caregiving should be a rewarding experience, so donít make a mistake that results in a tax bill that negatively impacts your credit.

Continue - Tips for Caregivers: What the IRS Allows (Updated January 23, 2020 )

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