Caring for a loved one could make you eligible for
deductions and tax credits
You may not have expected it to take quite so much of your
money. The average family caregiver spends about $7,000 a year
on household, medical and other costs related to caring for a
Fortunately, there is some light at the end of
the tax year: federal tax credits and deductions that apply
directly or indirectly to caregiving costs. Here are some ways
family caregivers potentially can reduce their tax burden.
Tax credit for ‘other
Taxpayers have long been able
to claim a tax credit for children up to age 16. Unlike a
deduction, which lowers your taxable income, a tax credit
directly reduces your tax bill. The 2017 federal tax law
expanded the Child Tax Credit (CTC) to allow taxpayers to claim
up to $500 as a nonrefundable “Credit for Other Dependents,”
including elderly parents.
Under this provision, in
effect through the 2025 tax year, the Internal Revenue Service
allows family caregivers to claim some individuals related by
adoption, blood or marriage — and even some friends — as “other
dependents” on their federal tax return as long as both parties
meet these IRS requirements:
Continue - Tips for Caregivers: What the IRS Allows (Updated
March 4, 2021 )
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