Tax Breaks for Family Caregivers
Are there any tax breaks that you know of for family caregivers? I help financially support my 82-year-old mother and would like to find out if I can write any of these expenses off on my taxes.
There are several tax credits and deductions available to adult children who help look after their aging parents or other relatives. Here are some options along with the IRS requirements to help you determine if you are eligible to receive them.
If your mother lives with you and you are paying more than 50% of her living expenses (housing, food, utilities, health care, repairs, clothing, travel and other necessities), and her 2021 gross income was under $4,300, you can claim your mother as a dependent and get a nonrefundable tax credit of up to $500.
If you split your mother's expenses with other siblings, only one of you can claim your mother as a dependent, and that person must pay at least 10% of her support costs. This is known as a "multiple support agreement."
The IRS has an interactive tool that will help you determine if your mother qualifies as a dependent. Go to IRS.gov/help/ita, scroll down to "Credits," and click on "Does My Child/Dependent Qualify for the Child Tax Credit or the Credit for Other Dependents?"
If you claim your mother as a dependent and you help pay her medical, dental and/or long-term care expenses, and were not reimbursed by insurance, you can deduct the expenses that are more than 7.5% of your adjusted gross income (AGI).
If, for example, your adjusted gross income is $80,000, anything beyond the first $6,000 of your mother's medical bills – or 7.5% of your AGI – could be deductible on your return. So, if you paid $8,000 in medical bills for her, $2,000 of it could be deductible. You can also include your own medical expenses in calculating the total.
Note that your state might have a lower AGI threshold, which means you might get a break on your state income taxes even if you cannot get one on your federal income taxes.
To see which medical expenses are deductible, see IRS Publication 502 at IRS.gov/pub/irs-pdf/p502.pdf.
If you are paying for in-home care or adult day care for your mother, you might qualify for the Dependent Care Tax Credit which can be worth as much as $4,000.
To be eligible, your mother must have been physically or mentally incapable of self-care and must have lived with you for more than six months. To claim this tax credit, fill out IRS Form 2441 (IRS.gov/pub/irs-pdf/f2441.pdf) when you file your federal return.
If you have a health savings account (HSA) or your employer offers a flexible savings account (FSA), you can use them to pay for your mother's medical expenses if she qualifies as a dependent. Be aware that if you use an HSA or FSA to pay for your mother's medical costs, you cannot take a tax deduction on those expenses too.
For more information, see IRS Publication 969, "Health Savings Accounts and Other Tax-Favored Health Plans" at IRS.gov/pub/irs-pdf/p969.pdf.
Savvy Living is written by Jim Miller, a regular contributor to the NBC Today Show and author of "The Savvy Living" book. Any links in this article are offered as a service and there is no endorsement of any product. These articles are offered as a helpful and informative service to our friends and may not always reflect this organization's official position on some topics. Jim invites you to send your senior questions to: Savvy Living, P.O. Box 5443, Norman, OK 73070.
There are several tax credits and deductions available to adult children who help look after their aging parents or other relatives. Here are some options along with the IRS requirements to help you determine if you are eligible to receive them.
Tax Credit for Other Dependents
If your mother lives with you and you are paying more than 50% of her living expenses (housing, food, utilities, health care, repairs, clothing, travel and other necessities), and her 2021 gross income was under $4,300, you can claim your mother as a dependent and get a nonrefundable tax credit of up to $500.
If you split your mother's expenses with other siblings, only one of you can claim your mother as a dependent, and that person must pay at least 10% of her support costs. This is known as a "multiple support agreement."
The IRS has an interactive tool that will help you determine if your mother qualifies as a dependent. Go to IRS.gov/help/ita, scroll down to "Credits," and click on "Does My Child/Dependent Qualify for the Child Tax Credit or the Credit for Other Dependents?"
Medical Deductions
If you claim your mother as a dependent and you help pay her medical, dental and/or long-term care expenses, and were not reimbursed by insurance, you can deduct the expenses that are more than 7.5% of your adjusted gross income (AGI).
If, for example, your adjusted gross income is $80,000, anything beyond the first $6,000 of your mother's medical bills – or 7.5% of your AGI – could be deductible on your return. So, if you paid $8,000 in medical bills for her, $2,000 of it could be deductible. You can also include your own medical expenses in calculating the total.
Note that your state might have a lower AGI threshold, which means you might get a break on your state income taxes even if you cannot get one on your federal income taxes.
To see which medical expenses are deductible, see IRS Publication 502 at IRS.gov/pub/irs-pdf/p502.pdf.
Dependent Care Credit
If you are paying for in-home care or adult day care for your mother, you might qualify for the Dependent Care Tax Credit which can be worth as much as $4,000.
To be eligible, your mother must have been physically or mentally incapable of self-care and must have lived with you for more than six months. To claim this tax credit, fill out IRS Form 2441 (IRS.gov/pub/irs-pdf/f2441.pdf) when you file your federal return.
Flexible Health Savings Accounts
If you have a health savings account (HSA) or your employer offers a flexible savings account (FSA), you can use them to pay for your mother's medical expenses if she qualifies as a dependent. Be aware that if you use an HSA or FSA to pay for your mother's medical costs, you cannot take a tax deduction on those expenses too.
For more information, see IRS Publication 969, "Health Savings Accounts and Other Tax-Favored Health Plans" at IRS.gov/pub/irs-pdf/p969.pdf.
Savvy Living is written by Jim Miller, a regular contributor to the NBC Today Show and author of "The Savvy Living" book. Any links in this article are offered as a service and there is no endorsement of any product. These articles are offered as a helpful and informative service to our friends and may not always reflect this organization's official position on some topics. Jim invites you to send your senior questions to: Savvy Living, P.O. Box 5443, Norman, OK 73070.
Published January 28, 2022
