As an unpaid caregiver, you commit time, energy and compassion to the ones you love who are living with Alzheimer’s. Chances are you’ve also had to cover some care costs out-of-pocket. Because you are a caregiver you might qualify for some tax benefits from the IRS. Though tax rules can be complicated and are subject to change, here are some expenses you might be able to write off. Talk to your tax advisor or accountant to learn more.
Medical expenses. Your loved one living with dementia may be considered your dependent for tax purposes. If this is the case you may be able to deduct their medical costs. Typically you can only deduct medical and dental expenses that are more than 10 percent of your adjusted gross income, but if you or your spouse were born before 1952 you maybe able to deduct medical expenses more than 7.5 percent of your adjusted gross income.
Note: Only expenses not reimbursed by insurance can be deducted.
- Medical fees from doctors, laboratories, assisted living residences, home health care and hospitals
- Cost of prescription drugs
- Cost of transportation to receive medical care
- Home modifications costs such as grab bars and handrails
- Personal care items, such as disposable briefs and food
Dependent Care Credit. If you paid someone to care for the person with dementia so you could work or look for work, you may be able to claim the “Child and Dependent Care Credit” on your federal income tax return. If eligible, you would be allowed a credit of up to 35 percent of your qualifying expenses, depending upon your adjusted gross income.
- You must have earned income
- The person with dementia must be unable to physically or mentally care for him or herself
- The person with dementia must be claimed as a dependent on your tax return
Flexible spending account. If the person with dementia is a dependent under the tax rules, you might be able to use your own workplace flexible spending account (FSA). This money can cover the person’s out-of-pocket medical costs or dependent care expenses in some cases.
For more information on deductible expenses and exemptions for caregivers, visit these links: