Tax Deductions for Caregiving: Top tips for families

Caregiving for an older loved one can get expensive.

Between managing your parent's prescription pickups, hiring help for house cleaning, and covering the cost of a new shower grab bar, it all adds up quickly!

And you’re not alone. The average family caregiver spends about $7,200 a year on costs related to caring for a loved one (Source: AARP).

But here’s some good news: many of these expenses qualify for tax deductions for caregiving, saving you hundreds or even thousands of dollars each year.

When you're paying for in-home senior care or handling medical bills, understanding which costs are deductible can provide much-needed financial relief.

Let's walk through some tips on claiming these benefits. For advice about your own tax obligations and deductions, always consult your own tax specialist or financial advisor.

Learn more in our complete guide to affordable senior home care.

Understanding Caregiver Tax Deductions

Tax deductions reduce your taxable income, which means you pay less in taxes overall.

When it comes to caregiver tax deductions, the IRS allows families to deduct many caregiving-related expenses, but there are specific rules to follow.

The biggest requirement is claiming your loved one as a dependent on your tax return. According to the most recent guidelines, As of July 2025, this means you've paid more than half of their living expenses for the year, their income is under $5,050, and they meet other dependency criteria.

There's also a threshold to keep in mind: your total qualifying medical expenses (including caregiver expenses) must exceed 7.5% of your adjusted gross income (AGI) before you can start deducting them. (Source: IRS)

For example, if your AGI is $80,000, your first $6,000 in medical expenses aren't deductible. But if you spent $12,000 on qualifying expenses, you could deduct $6,000.

Don't worry if this sounds complicated. The key thing to remember is that you need significant medical expenses before any become deductible.

Visit the IRS website or consult a tax professional to learn more about your options as a family caregiver.

Helpful Resource: FAQ For Caregivers (IRS)

What Home Care Expenses Are Tax Deductible?

Many families ask, “Are caregiver expenses tax deductible?” The answer is yes, if they qualify as medical expenses and you meet the requirements we mentioned above.

Let’s go over what you may be able to deduct for home care.

In-Home Care Services

Professional caregiving services often qualify as deductible medical expenses. This typically includes costs for:

• Personal care assistance with bathing, dressing, and mobility
• Medication reminders and health monitoring
• Companion care for those who can't be left alone due to medical conditions

While Herewith Helpers provide non-medical companion care and personal caregiving assistance, these services may still qualify for home care tax deduction when they're part of a medically necessary care plan prescribed by a doctor.

Other Qualifying Expenses

Beyond caregiver services, many other caregiving costs may be deductible:

• Medical equipment like wheelchairs, hospital beds, or oxygen tanks
• Home modifications for safety or accessibility (ramps, grab bars, stair lifts)
• Transportation costs for medical appointments
• Prescription medications and medical supplies
• Adult day care programs when medically necessary

What's Not Deductible

It's just as important to do your research and find out what doesn't qualify. Here are a few examples of nondeductible expenses:

• General household expenses that benefit everyone in the home
• Non-medical companionship or social activities
• Meals, unless part of medical care in a facility setting
• Home improvements that increase property value (though medical modifications may qualify)

Understanding these exclusions helps you focus on eligible caregiver expenses when tax time comes.

Available Tax Credits

While deductions reduce your taxable income, tax credits directly reduce the amount of tax you owe, making them even more valuable. Here are the main credits that may help with senior care tax deduction benefits as of July 2025 (find more tax credits on the IRS website):

• Credit for Other Dependents: Up to $500 per qualifying dependent
• Child and Dependent Care Credit: Portion of up to $3,000 for one person, $6,000 for two or more dependents
• Head of Household Status: Increased standard deduction if you're single and supporting a dependent parent

These credits can significantly reduce what you owe, making them worth investigating alongside deductions.

How to Claim Tax Deductions for Senior Home Care

Ready to claim these benefits? Here are our tips on how to get started:

1. Keep detailed records throughout the year. Save receipts for all medical and caregiver expenses, including any in-home care tax deduction eligible costs. Create a simple spreadsheet or use a dedicated folder to track costs.

2. Determine if itemizing makes sense. You'll need to itemize deductions (rather than taking the standard deduction) to claim most caregiver expenses. This only makes sense if your total itemized deductions exceed the standard deduction for your filing status.

3. Gather necessary tax forms. You'll typically need Schedule A for itemizing deductions, and possibly Form 2441 for the Child and Dependent Care Credit.

4. Consider professional help. Tax laws around caregiving can be complex. If you're unsure about what qualifies or how to claim these benefits, consider working with a tax professional who understands caregiver situations.

Remember to keep receipts and documentation for at least three years in case of questions from the IRS.

Reduce Your Caregiving Costs for Additional Savings

While understanding tax deduction rules helps at tax time, reducing your ongoing caregiving costs can provide immediate relief.

Traditional agencies often charge high markups and require minimum hours that don't fit your family's actual needs.

On Herewith, you set your own budget and schedule, paying only for the care you need. You can book Helpers for one-time tasks like grocery shopping or ongoing support to fit your situation.

Herewith connects you directly with background-checked Helpers, eliminating agency fees and giving you more control over your caregiving costs.

Making Tax Season Work for Your Family

Yes, tracking expenses and understanding tax rules takes effort, but many families save thousands of dollars by claiming these often-overlooked deductions.

You don't have to handle caregiving costs alone, either. Flexible, affordable options like Herewith can help you provide quality care while managing your budget.

Ready to explore more affordable in-home care options?

Book a Helper and see how much you could save.