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Tax Tips for Caregivers — Part 1

You may be able to take advantage of certain tax breaks for dependents

You may be able to declare your parent as a dependent, if your parent:

  • is a U.S. citizen or a permanent resident;
  • is receiving less income than the personal exemption amount for the tax year (which was $3,800, excluding Social Security, in 2012);
  • is not eligible to or required to file an income tax return themselves;
  • is not filing a joint income tax return;
  • is receiving more than 50 percent of all financial support from you.

You can claim both your parents if they each meet the above criteria and they don’t need to be living with you. Financial support can include rent or room and board charges, food, clothes, medical bills not covered by insurance, and the cost of in-home care. Adaptations to your home such as a wheelchair ramp or other accessibility accommodations might also qualify. See IRS pub 501 Exemptions.

You also might be able to claim dependent care expenses for your disabled spouse or qualifying parents if physical or mental disabilities keep them from being able to care for themselves and you:

  • paid someone to care for them so you (and your spouse if filing jointly) could work or look for work;
  • live with the qualifying person;
  • paid more than 50 percent for the upkeep of the home;
  • paid someone other than your spouse or other dependent to provide the care;
  • paid less for dependent care than the amount of your income for the year (for married couples filing jointly, the care must have cost less than the income of the lower-earning spouse).

Some dependent care expenses can qualify as deductible medical expenses if you itemize on your return. You cannot claim the expense as both medical and dependent care.

Go to the Internal Revenue Service websiite at http://www.irs.gov/ or call 1-800-TAX-1040 for detailed eligibility rules, brochures and filing forms. See instructions for form 2441 to learn more about claiming the dependent care tax credit.

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