How Family Caregivers Can Get the Tax Breaks They Deserve

Caring for a loved one could make you eligible for deductions and tax credits

Andy Markowitz and Deirdre van Dyk

Updated February 17, 2025

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En español

Published November 07, 2019

/ Updated February 17, 2025

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As a family caregiver, you went into the job knowing it would take much of your time.

You may not have expected it to take quite so much of your money. The average family caregiver spends about $7,200 a year on household, medical and other costs related to caring for a loved one.

Fortunately, you’ll find some light at the end of the tax year: federal tax credits and deductions that apply directly or indirectly to caregiving costs. Here are some ways family caregivers may be able to reduce their tax burden.

Tax credit for ‘other dependents’

Unlike a deduction, which lowers your taxable income, a tax credit directly reduces your tax bill. The Credit for Other Dependents allows taxpayers to claim up to $500 as a nonrefundable Credit for Other Dependents, including parents in your care.

Under this provision, in effect through the 2025 tax year, the Internal Revenue Service allows family caregivers to claim individuals who can't take care of themselves and are related by adoption, blood or marriage — and even some friends — as other dependents on their federal tax return. To qualify, your loved one must:

Join Our Fight for Caregivers

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1. Be a U.S. citizen, U.S. national or legal resident. Your loved one must also have a valid identification taxpayer identification number (generally, a Social Security number).

2. Below a certain income. Your loved one’s gross income in 2024 was not greater than $5,050.

3. Dependent on you. Your loved one lives with you for more than half a year, and you pay more than 50 percent of that person’s living expenses, including clothing, food, lodging, medical and dental care, recreation, transportation and other necessities.

4. Not also filing a joint return with a partner. You can claim a dependent who is married only if he or she does not file a joint return with a spouse or files a joint return only to get a refund of income tax withheld and does not claim any other credits or deductions.

In addition, you must be:

5. The only person claiming the dependent. Two or more people can split expenses, but only one can claim the person as a dependent.

6. Not a dependent yourself. You can claim a dependent only if you are not a dependent of another taxpayer.

The IRS has an interactive tool to help you determine if a dependent qualifies you for a tax credit.

Be aware that adding a dependent makes that person part of your household, which could impact the cost of health insurance purchased through the Affordable Care Act marketplace.

Claiming a head of household deduction

If you are a single taxpayer or married but living apart from your spouse, adding a dependent relative who lives with you could bump you up to head of household.

The change in status raises your standard deduction for the 2024 tax year to $21,900, up from $14,600 if you are single or married but filing separately. Remember that taking the standard deduction means you can’t claim any personal exemptions.

A parent does not need to live with you for you to claim head of household status. Any other relative must have lived with you for at least half of the tax year.

If you use a multiple support agreement to claim your dependent, you cannot use the dependent to file as a head of household.

Medical expenses are deductible

You can deduct the money you paid to cover your loved one’s unreimbursed medical and dental costs if the qualified medical expenses of everyone claimed on your taxes total more than 7.5 percent of your adjusted gross income (AGI) for that year and if your total itemized deductions are more than your standard deduction.

IRS Publication 502 details what is and isn’t deductible. Here are some acceptable deductions:

Acupuncture
Artificial teeth
Bandages
Copayments and deductibles
Eyeglasses
Hearing aids
Home health aides who give medication, change bandages or bathe your dependent
Home and vehicle modifications needed for safety or mobility
Insulin
Oxygen and oxygen equipment
Personal protective equipment
Prescribed medications
Professional health aide costs during respite care
Wheelchairs, including maintenance

Not all expenses related to caregiving are deductible. Here are some to keep in mind.

Items and services that benefit the whole household, not just the one receiving care, cannot be claimed.
Bills paid from flexible spending accounts and health savings accounts (FSAs and HSAs). If you contributed a portion of your pre-tax earnings to a medical savings plan, any health care costs paid for from the FSA or HSA cannot be included in your deduction.

You'll want to keep a clear and organized backup documenting any deduction, including receipts and a log, to show your loved one lived with you for at least half the year. Not only will it be helpful should you be audited, but it will ensure you don't miss any allowable deductions.

Tax credit for paid care

Unlike the Child Tax Credit or Credit for Other Dependents, which confer a tax break based on the existence of a qualifying child or other dependent, the Child and Dependent Care Credit is based on money you spend to have someone else care for that person. For the 2024 tax year, you can claim a portion of up to $3,000 in caregiving costs for one qualifying person and up to $6,000 for two or more.

Oddly, given the name, this tax credit does not require that your loved one qualify as your dependent in certain circumstances. However, the IRS has rules for when you can claim it. Among them:

Cohabitation. The person you are claiming the credit for must have lived with you for at least six months during the tax year.
Dependency. The person is your dependent or could be, except for having gross income higher than the allowed maximum, which is $5,050 in 2024, or filing a joint tax return with a spouse that year.
Incapacity. The person is physically or mentally unable to care for himself or herself.
Your employment. You pay an adult day care program, child care program or a home health worker to assist your loved one so you can go to work or look for work.
Your spouse. If you are married, your spouse also must work, be a student or be disabled for you to qualify for this credit.
You live in the U.S. for at least half the year. There are special rules for military personnel stationed abroad.

If you plan to claim any of these credits or deductions, be sure to outline all of your costs and get someone to help you with your taxes, says Lynnette Lee-Villanueva, vice president of  AARP Foundation’s Tax-Aide, a free tax-preparation service.

Tax-Aide has more than 35,000 sites nationwide that are open annually during tax season. The online site locator lets you find help in your area.

This article, originally published in 2017, has been updated to reflect tax laws and policies for the 2024 tax year. 

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Andy Markowitz covers Social Security and retirement for AARP. He is a former editor of the Prague Post and Baltimore City Paper.

Deirdre van Dyk is an AARP associate editor covering Social Security, caregiving, technology and fraud. She previously worked at USA Today and Time, where she covered business, government, sustainability and innovation.

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