Tax Breaks Available for Caregivers Caring for Elderly Parents

Amherst, NH Resident Seeks Information

If you are the caregiver for your elderly parent, you may be eligible for tax deductions. The first tax credit that you may be able to utilize is the child and dependent care tax credit. If you are paying for care for your elderly parent while you are working, these expenses may be eligible. You can claim up to $3,000 for one person or $6,000 for two. A second tax credit is available for other dependents, with up to $500 in tax credits. To be eligible for this the parent must be a US citizen with a gross income that is not greater than $4,400 and have lived with you more than 50% of the year.

An Amherst resident had just moved her elderly mother into her home so that she could care for her. As the expenses began to add up for her mother’s care, she was looking for information about tax deductions that might be available to her as a caregiver.

Eligibility for Claiming Your Parents as Dependents

There are stipulations set forth by the IRS to be able to claim a parent as a dependent. Beyond those already mentioned, you must have paid more than 50% of living expenses for your dependent. The parents cannot be claimed as a dependent on another tax return. If these stipulations are met, you may be eligible to claim your elderly parent as a dependent on your taxes, saving you money.

Medical Expenses Can Be Deducted for Caregivers

To take advantage of deductions for medical expenses you must itemize your taxes, these are not available to those taking the standard deduction. To deduct medical expenses for your elderly parent, out of pocket qualified expenses for the year must be at least 7.5% of your adjusted gross income. These include payments to doctors, prescriptions, nursing assistance, and medical necessities such as hearing aids and wheelchairs.

Expenses that are not covered include gym memberships, vitamins, cosmetic surgeries, insurance premiums, and non-prescription drugs are often deemed ineligible.

The Amherst resident was enlightened by the Merrimack Tax Associates’ team. She now has a better understanding of how she can deduct some of the expenses for her mother’s care at the end of the year on her tax return.