Caregiving Tips

Guidance on how to properly care for your loved ones as they navigate through the aging process

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10 Tips on the Financial Matters of Caregiving - TIP #4: Claim Caregiving Tax Credits and Deductions

On average, family caregivers spend approximately 26% of their own income on caregiving expenses. It can be overwhelming. Here's something that could help: you may be eligible for certain tax credits and deductions related to the money you spend on caregiving. These are some things to keep in mind to ensure you maximize any tax credits or deductions for which you may be eligible. 

 

  • Keep good records. You'll need to track all of the money you spend on caregiving. Keep receipts and/or a log of care and medical expenses you pay for, as well as what you spend on their living arrangements. You may also need to prove that they have been living with you and for how long. 
  • Get help from a tax expert. Tax law can be complicated so it's a good idea to get help from an expert who is familiar with caregiving tax credits and deductions. If the cost of a tax professional is prohibitive for you, AARP Foundation's Tax-Aide program offers free tax preparation services by very well-trained volunteers at more than 5,000 sites across the nation. You can find a location near you using their site locator
  • Become familiar with caregiving tax credits and deductions. Learn about the "Credit for Other Dependents", and other tax credits and deductions that you may be eligible for, in AARP's article, Tax Tips for Family Caregivers
  • If you are paid to provide care for a family member, be sure to pay required income taxes and ensure your family member pays required employer taxes. You'll find more info in the AARP article, Can I Get Paid to Be a Caregiver for a Family Member?
  • Advocate for the Credit for Caring Act, which would alleviate some of the financial strain by providing a tax credit to help offset out-of-pocket costs for family caregivers. The bill would provide a new, non-refundable federal tax credit of up of 30% of qualified expenses paid or incurred by the family caregiver above $2,000. The credit could be up to $5,000 for eligible working family caregivers. Eligible costs would include: home care aides, adult day care, home modifications, assistive technology, respite care, transportation, or other supports that help their loved ones. Be sure to let your Members of Congress know that this tax credit, and other credits and deductions, are crucial for family caregivers and ask for their support.

It's always a good idea to look into tax credits and deductions - never assume you won't qualify until you've confirmed eligibility with a tax professional or Tax-Aide volunteer. 

 

Take care,

Amy Goyer, AARP Family & Caregiving Expert

Author, Juggling Life, Work and Caregiving

 

 

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