In this article, we’ll cover:
- Are caregiver expenses tax deductible?
- Are caregiver expenses considered medical expenses?
- What caregiver medical expenses are tax-deductible?
- What other types of tax relief are available for caregiver expenses?
- How can I claim caregiver expenses?
Are caregiver expenses tax deductible?
Yes, costs related to taking care of an elderly parent, relative, or even a qualified friend are eligible for tax deductions.
To claim caregiver expenses, you must first add your loved one as a dependent on your tax forms. Your loved one may be eligible to be your dependent based on your relationship, their legal residency status, income level, and the percentage of your income spent on medical expenses. For example, your loved one must have legal residence in the United States with a valid ID, and cannot earn more than $4,300 in gross income for the tax year. If your loved one lives with you and you pay for more than 50% of their living expenses, they can also qualify as your dependent.2
This IRS interactive tax assistant can help you understand if your loved one qualifies as a dependent.
Are caregiver expenses considered medical expenses?
If you incurred medical expenses for a loved one that were not reimbursed by insurance, you may file for a tax deduction. Keep in mind that these medical expenses must cost more than 7.5% of your adjusted gross income that year to reap any tax breaks.3
For example, if your adjusted gross income this year is $100,000, then the first $7,500 of your expenses are not tax-deductible. If you incurred $25,000 of medical expenses for the same year (including caregiver expenses), however, you could deduct $17,500 ($25,000-$7,500) from your taxes that year.
What caregiver medical expenses are tax-deductible?
Under Internal Revenue Code 213(d)(1), "medical care includes amounts paid for the diagnosis, cure, mitigation, treatment, or prevention of disease, or for the purpose of affecting any structure or function of the body." Medical expenses that qualify for tax deductions include:
- Reasonable home modifications, like a ramp to accommodate wheelchairs or support bars for someone with disabilities Car modifications to accommodate your dependent’s needs
- A personal attendant for people unable to perform activities of daily living (ADL)
- Travel to doctor’s appointments and therapy
- Assisted living costs
- Prescriptions and necessary medical equipment
- Diagnostic tests4
Here’s a comprehensive list of acceptable deductions.