Can I get a tax deduction for taking care of an elderly parent?

According to a 2021 AARP study, roughly 48 million Americans provide unpaid care for an adult family member or friend, often incurring significant out-of-pocket costs. If you are one of these caregivers, you may be wondering: Can I get a tax deduction for taking care of an elderly parent? The answer is yes, potentially through several tax credits and deductions if you meet specific IRS criteria.

Quick Summary

Several tax benefits are available for those caring for an elderly parent, provided they meet IRS qualifications. These benefits can include claiming your parent as a dependent, utilizing the medical expense deduction, and potentially qualifying for the Credit for Other Dependents, or the Child and Dependent Care Credit.

Key Points

• Claiming as Dependent: You may be able to claim your elderly parent as a 'qualifying relative' dependent if you provide more than half of their financial support and their gross income is under the IRS limit ($5,250 for 2025).

• Medical Expense Deduction: You can itemize and deduct your parent's unreimbursed medical expenses that exceed 7.5% of your AGI, even if you can't claim them as a dependent due to the income test.

• Utilize caregiver credits: The Credit for Other Dependents offers a non-refundable credit of up to $500, and the Child and Dependent Care Credit provides tax relief for work-related care expenses for a disabled dependent.

• Check Head of Household eligibility: If you are unmarried and can claim your parent as a dependent, you may be able to file as Head of Household, which offers a higher standard deduction.

• Keep thorough records: Accurate record-keeping of all caregiving expenses is crucial for maximizing your tax benefits and protecting yourself in case of an audit.

• Multiple Support Agreements: If you share caregiving with siblings, a Multiple Support Agreement (Form 2120) can allow one person to claim the dependent, provided all parties agree.

Tax benefits for caring for an elderly parent

Caring for an elderly parent can be both financially and emotionally demanding. Fortunately, the IRS offers several tax benefits to help offset some of these costs. The specific deductions and credits you can claim depend on your financial situation and whether your parent qualifies as your dependent.

Claiming your parent as a dependent

One significant way to gain tax benefits is by claiming your parent as a qualifying relative. To do this, they must meet several IRS tests, including citizenship requirements and not being claimed as a qualifying child by anyone else. Additionally, they must either be your relative or have lived with you all year. There is also a gross income test, which for 2025 means their income must be less than $5,250, though Social Security benefits generally don't count unless there is other taxable income. Finally, you must provide over half of their total support for the year, which includes housing, food, utilities, and medical costs.

If multiple siblings contribute to a parent's care, only one can claim the parent as a dependent. If no single person provides over 50% of the support, but a group does, they can file a Multiple Support Agreement (IRS Form 2120). This allows one person who contributed over 10% of the support to claim the dependent, with the others signing a waiver.

Medical expense deductions and credits

In addition to claiming your parent as a dependent, you may be able to claim deductions or credits for their medical care.

The medical expense deduction

You can itemize and deduct qualified medical and dental expenses that exceed 7.5% of your adjusted gross income (AGI). This includes unreimbursed medical expenses you paid for your parent, even if you cannot claim them as a dependent due to income limits or if they filed a joint return.

Qualifying medical expenses may include:

• In-home care.
• Assisted living costs (with specific rules).
• Prescription medications and medical equipment.
• Health and long-term care insurance premiums.
• Home modifications for medical needs.
• Transportation to medical appointments.

The Child and Dependent Care Credit

This non-refundable credit is for caregivers who pay for care for a dependent so they can work or look for work. Your parent must be physically or mentally unable to care for themselves and have lived with you for over half the year. You must have earned income and provide the care provider's information.

The Credit for Other Dependents (ODC)

If your parent qualifies as a dependent but not for the Child and Dependent Care Credit, you might be eligible for the ODC. This non-refundable credit is up to $500 per qualifying dependent and phases out at certain income levels.

Head of Household filing status

Unmarried individuals who can claim a parent as a dependent may qualify to file as Head of Household, even if the parent doesn't live with them. This status offers a higher standard deduction than single filing. To qualify, you must pay over half the cost of maintaining a home for yourself and your parent. If your parent doesn't live with you, you must pay over half the cost of their main home for the year.

Tax credits vs. tax deductions

Understanding the difference between tax credits and deductions is important.

Comparison Table: Tax Deductions vs. Tax Credits

Feature	Tax Deduction	Tax Credit
Effect on Taxes	Reduces your taxable income.	Directly reduces the amount of tax you owe.
Value	Varies based on your tax bracket.	Typically a dollar-for-dollar reduction.
How to Claim	Requires itemizing deductions.	Claimed directly on your tax return, can be used even with standard deduction.
Examples	Medical Expense Deduction.	Credit for Other Dependents, Child and Dependent Care Credit.

Record-keeping and professional advice

Accurate record-keeping is crucial for claiming these benefits. Keep detailed records of all care-related expenses. For complex situations, consider consulting a tax professional to maximize savings and avoid errors.

Conclusion

Tax benefits can help ease the financial burden of caring for an elderly parent. By understanding dependency requirements, medical expense deductions, and available credits, caregivers can reduce their tax liability. Maintaining detailed records and seeking professional advice when necessary are key to navigating these tax rules effectively.

Key takeaways

• Claiming as Dependent: You can claim your parent as a 'qualifying relative' if you provide over half their support and their gross income is below $5,250 in 2025.
• Deduct medical expenses: Itemize and deduct your parent's unreimbursed medical expenses exceeding 7.5% of your AGI.
• Utilize caregiver credits: The Credit for Other Dependents offers up to $500, and the Child and Dependent Care Credit helps with work-related care expenses for a disabled dependent.
• Check Head of Household eligibility: Unmarried individuals claiming a parent as a dependent may file as Head of Household for a higher standard deduction.
• Keep thorough records: Detailed records of caregiving expenses are essential for maximizing benefits.

FAQs

Question: What is the gross income limit for claiming an elderly parent as a dependent in 2025? Answer: For 2025, your parent's gross income must be less than $5,250 to be a dependent. Nontaxable Social Security benefits don't usually count unless there's other taxable income.

Question: Can more than one child claim a parent as a dependent? Answer: No, only one person can claim a parent as a dependent. If multiple people contribute significantly, a Form 2120 (Multiple Support Agreement) can allow one to claim the dependent with the others' agreement.

Question: Do medical expenses need to be over a certain amount to be deductible? Answer: Yes, you can only deduct the amount of unreimbursed qualified medical expenses exceeding 7.5% of your AGI. You must itemize deductions to do this.

Question: Can I claim Head of Household if my parent lives in a nursing home? Answer: Yes, you may file as Head of Household if you are unmarried, claim your parent as a dependent, and pay over half the cost of maintaining their main home for the year, even if they don't live with you.

Question: Can I claim both the medical expense deduction and the Child and Dependent Care Credit? Answer: You can claim both, but you cannot use the same expenses for both benefits. Using qualifying expenses for the dependent care credit first is often more advantageous.

Question: Does my parent have to live with me for me to claim them as a dependent? Answer: No, they don't have to live with you to be a qualifying relative dependent if you provide over half their support and meet other criteria. However, they must live with you, or you must pay over half the cost of their home, to use them for Head of Household status.

Question: How do Flexible Spending Accounts (FSAs) or Health Savings Accounts (HSAs) help with caregiving? Answer: FSAs and HSAs allow using pre-tax funds for qualified medical expenses for dependents, reducing taxable income. HSAs can be especially useful for long-term care.

Frequently Asked Questions

What is the gross income limit for claiming an elderly parent as a dependent in 2025?

For the 2025 tax year, your parent's gross income must be less than $5,250 to qualify as your dependent. Notably, nontaxable Social Security benefits are generally not counted toward this limit unless the parent has other taxable income.

Can more than one child claim a parent as a dependent?

No, only one person can claim a parent as a dependent on their tax return. If multiple people contribute to the parent's support, those who contributed more than 10% may sign a Form 2120 (Multiple Support Agreement) to allow one person to claim the dependent.

Do medical expenses need to be over a certain amount to be deductible?

Yes, you can only deduct the portion of unreimbursed qualified medical expenses that exceeds 7.5% of your Adjusted Gross Income (AGI). You must also itemize your deductions to claim this benefit.

Can I claim Head of Household if my parent lives in a nursing home?

Yes, you may be able to file as Head of Household even if your dependent parent does not live with you, as long as you pay more than half the cost of keeping up their main home for the year.

Can I claim both the medical expense deduction and the Child and Dependent Care Credit?

You can claim both, but you cannot use the same expenses for both. For example, if a care expense qualifies for both, it's often more beneficial to use it for the dependent care credit first, as a credit provides a direct tax reduction.

Does my parent have to live with me for me to claim them as a dependent?

Not necessarily. Your parent is a qualifying relative even if they don't live with you, as long as you provide more than half of their support and they meet other IRS criteria. However, to use them to qualify for Head of Household status, you must pay more than half the cost of keeping up their home.

How do Flexible Spending Accounts (FSAs) or Health Savings Accounts (HSAs) help with caregiving?

FSAs and HSAs allow you to use pre-tax dollars to pay for qualified medical expenses for yourself and your dependents, effectively reducing your taxable income. An HSA can be particularly useful for long-term care needs.