Your Guide to Tax Deductions for Elderly Parents

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn

Calculator laying on top of a phone

Are you an adult child caring for aging parents wondering, “What are elder care expenses?” or “Do I qualify for a tax credit for taking care of elderly parents?”

If so, you’re not alone.

Many adult children who are caring for elderly parents and researching elder care for aging loved ones feel lost in the technicalities.

In terms of the tax implications of elder care, it can be helpful to find answers to pending questions:

  • Can I claim my elderly parents as “dependent?”
  • Is elder care tax-deductible? 
  • Are in-home caregivers tax-deductible?

We aren’t legal advisers, but we’re sharing information that will provide insight as you research how to care for your aging loved ones. In this blog, we discuss elder care in-home expenses and some tax deductions you may be eligible for as a family caregiver.

What Are Elder Care Expenses?

As you’ve likely experienced, the cost of taking care of an elderly parent adds up. Care expenses are important to consider, especially when deciding who is responsible for taking care of aging parents.

Elder care expenses are financial necessities when taking care of an aging family member. Costs may include:

  • Meals
  • Medicines
  • Residency
  • Medical care and exams
  • Mental health support
  • Therapy
  • Household services
  • Qualified long-term care services, etc. 

IRS Publication 502 includes finer details with an exhaustive list of the tax-deductible expenses.

If you help your aging loved one pay for living and care expenses, or if you meet certain requirements, you could be eligible for senior care tax deductions to lighten the load. You may even be able to claim your elderly parent as “dependent,” furthering your eligibility for elderly care tax credits and deductions.

How Can I Claim My Elderly Parent as “Dependent?”

The first thing you want to look into as a family caregiver is claiming your elderly parent as “dependent.” There are some rules for your parent qualifying as a dependent, but qualifying can help you receive an elderly care tax credit.

According to the IRS, you must meet the following criteria to claim your elderly parent as a dependent on your tax return:

  1. Personally independent. You (and your spouse if filing jointly) cannot be dependents of another taxpayer.
  2. Dependent on you. Your parent can’t be a qualifying child of another taxpayer (i.e., you and your sibling can’t both claim your elderly parent as dependent).
  3. Spousal tax considerations. If married, your parent can’t file a joint return unless your parent and his/her spouse file a joint return only to claim a refund of income tax withheld or estimated tax paid.
  4. Legal residence. Your parent must be a U.S. citizen, U.S. national, U.S. resident alien, or a resident of Canada, Mexico, the Canal Zone, or the Republic of Panama.
  5. Low income. Your parent’s yearly gross income must be less than $4,300.
  6. Financially reliant. You must have paid for more than half of your parent’s support during the calendar year.
  7. Residency. If your parent is a foster parent, they must have lived with you all year in your main home and as a member of your household.

Do you have a unique circumstance and still have questions after reading the criteria above? The IRS has a 15-minute online interview that you can take to help you come to a conclusion: Who May I Claim as a Dependent?

If you aren’t a full-time family caregiver and invest in professional in-home care for your aging parents instead, this next section is for you.

Is Home Care for the Elderly Tax-deductible?

Many older adult children are unable to care for their aging parents, so they hire an in-home caregiver. If you pay someone to come into your home and care for a dependent loved one, you may even be considered a household employer (pg. 16 of Publication 503).

Regarding the primary question, “Is home care for the elderly tax-deductible?” the answer is yes, you can receive an elderly care tax credit on your tax return. 

Some other common questions include, “Is house cleaning tax-deductible?” and “Is dementia care tax-deductible?” In short, yes, both are tax-deductible, but your eligibility will determine whether you qualify for them. 

Read IRS Publication 503 to learn more about dependent care deductions and who can claim the tax credit in your family.

In-home Elder Care for Your Aging Parents

It’s best to speak with a certified public accountant (CPA) for specific questions about who is eligible for senior tax offsets and elderly dependent tax deductions in your family. 

However, if you’re an adult child of aging parents, you probably still have questions about home care outside of tax deductions:

  • How do I take care of my elderly parents? 
  • What does senior in-home care do for my loved one?

Stowell Associates is a premium in-home care company with a professional Care Team on call to answer any of your elder care questions. Our Care Managers are on-call to help you make the best decision regarding your aging loved one’s short- or long-term care.

When you call to speak with Stowell Associates about the services we provide, it is our goal to leave you with a better understanding of how we can be helpful to you and, most importantly, for you to feel that you have been heard.”

– Wenda Krupp, RN, Care Advisor

Contact Stowell Associates today.

More to explore