Watching your parents grow old is hard. Being the child responsible for their care is even harder. If you’re shouldering the responsibility for the care of one or both of your parents, you may be feeling more than just an emotional burden. You’re probably feeling the financial burden, as well.
Thankfully, there are several different deductions, exemptions, and credits available for taxpayers who are bearing the brunt of eldercare. This doesn’t take the stress out of supporting or caring for an elderly parent by any means, but it can certainly reduce the financial strain you’re under.
Claiming Your Parent as a Dependent
Right off the bat, you may want to consider claiming your parent as your dependent. This will qualify you for certain exemptions. However, if you do this, the following conditions must be true:
- You must pay for more than 50% of your parent’s support costs.
- Your parent cannot file their own tax return or joint return that same year.
- Your parent must be a citizen of the U.S., Canada, or Mexico.
Deducting Medical Expenses
In addition, there are certain medical expenses that may qualify for deductions:
- Home modifications directly related to a disabled condition
- Assisted living or nursing home facility fees
- In-home care expenses (only services directly related to medical care are deductible)
Claiming the Dependent Care Credit
If your elderly parent lives with you, is your dependent, and is unable to care for themselves, the dependent care credit may be a good fit. This credit is intended to enable you and your spouse to go to work instead of staying home to care for your parent. However, be advised that there’s a $3,000 cap (per individual) on the total expenses you can use to calculate your credit.
This is just a brief, simplified rundown of the financial assistance you may receive when caring for an elderly parent. If you’d like to find out more, please don’t hesitate to contact the experts at Taxation Solutions, Inc. We’re here to help taxpayers like you in Indianapolis with all your tax problems and questions.