Elder Care Tax Breaks

Oct 02, 2015

If you’re paying for the care of an elderly parent or relative, you may be able to take advantage of several tax provisions that could help you recoup some of your expenses.

Dependency Exemption Generally, you may claim a dependency exemption ($4,000 in 2015) for an individual if you provide more than 50% of the individual’s support costs and the individual:

  • Lives with you or is related to you
  • Does not have gross income exceeding the exemption amount
  • Does not file a joint return
  • Is a U.S. citizen or a resident of the U.S., Canada, or Mexico

The exemption is phased out for higher income taxpayers.

Medical Expenses

Healthcare_ElderlyIf you pay medical expenses for your dependent parent or other dependent relative, you may include those expenses with your own for tax deduction purposes.* The deduction may also be available if your parent or relative fails to qualify as your dependent because of the gross income and/or the joint return test listed above. Medical expenses include the qualifying long-term care costs of a “chronically ill” individual.

Dependent Care Credit

Additionally, you may be entitled to a tax credit for a portion of any costs you incur for the care of your parent or relative that enables you and your spouse to work. Your parent or relative must live with you and be unable to care for himself/herself.

  • Medical expenses are deductible to the extent they exceed 10% of your AGI (or 7.5% of AGI if you or your spouse is 65 or older).

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