Tax Deductions and Credits for Senior Home Care Expenses
Paying for home care can be a significant expense, but you may be able to offset some costs through federal and state tax deductions or credits. Understanding which home care expenses qualify, and how to claim them, can help families make home care more affordable. Here’s what you need to know about tax benefits for senior home care.
Medical Expense Deductions
- Itemized Deductions: If you itemize deductions on your federal tax return (Schedule A), you may be able to deduct certain home care costs as medical expenses. Qualifying expenses must exceed 7.5% of your adjusted gross income (AGI).
- What Qualifies: Payments for in-home nursing care, certain personal care, and therapy prescribed by a doctor may qualify as deductible medical expenses. Housekeeping or custodial care not related to medical needs generally does not qualify.
Dependent Care Credit
- If you pay for home care so you (or your spouse) can work or look for work, you may qualify for the federal Child and Dependent Care Credit. The care must be for a dependent who is physically or mentally unable to care for themselves.
Flexible Spending Accounts (FSAs) and Health Savings Accounts (HSAs)
- You may be able to use FSA or HSA funds for eligible home care expenses if they are medically necessary and properly documented.
State Tax Benefits
- Some states offer their own tax credits or deductions for senior care expenses. Check with your state tax agency or a tax professional.
Documentation Is Key
- Save all receipts, care contracts, and medical documentation.
- Consult a tax professional to maximize your deductions and ensure compliance with current IRS rules.
For more tips and a detailed guide on home care tax benefits, visit our Home Health Care for Seniors resource page.
