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As a caregiver, you may qualify for tax deductions and credits if you are paying privately for care. Federal taxes Deductible expenses include:
A caregiver can take federal income tax deductions only if the ill person has been certified as chronically ill. This certification must have been made by a licensed health care practitioner within the last 12 months. Long-term care services must be given under a prescribed plan of care. If you are caring for someone with Alzheimer's, keep records about your payment for services. And be sure to save certifications and plans of care. State taxes If you paid someone to care for your dependent so you could work, you may qualify for your state's child and dependent care credit. A qualifying dependent is a person of any age who is physically or mentally incapable of self-care. The dependent must also live with you. The amount of credit varies state by state. Many states allow for a deduction of medical expenses for long-term care services. In order to deduct long-term care expenses, the chronically ill person must be certified by a physician and must have a plan of care. Some states give a caregiver tax credit to alleviate expenses incurred as a result of in-home care of a chronically ill person. Most states require the care recipient to live with the caregiver for at least six months of the year. Each state has different qualifying expenses and different credit amounts. Many states allow for a credit or deduction of long-term care insurance premiums paid for the taxpayer, the taxpayer's spouse and the taxpayer's dependents. For most states, an insurance policy must be qualified under federal law or authorized by the state. The amount of the credit or deduction varies state by state. For additional information on any of these tax credits or deductions contact your state Department of Revenue. The information provided on this website is not intended to be, and should not be construed as, tax advice. The information contained herein is the most accurate information available to us at this time and the legislation is subject to change. Accordingly, please consult with a tax advisor or the state department of treasury to confirm the accuracy of the information. In addition, since the manner in which tax laws may affect a taxpayer depends upon the taxpayer's particular situation, please consult a competent tax professional for advice about the proper application of the laws to your situation.
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