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Britt Erica Tunick is an award winning financial journalist who has spent the past 17 years writing about virtually every aspect of finance. She has mastered the art of boiling down complicated financial topics for readers to understand. |
Should you find yourself taking care of your aging parents within your home, you may find some reprieve by being able to claim them as dependents. From medical expenses, home safety renovations, cost of food and living expenses all amount towards a tax break when caring for your parents. Claiming Your Parents as Dependents By Britt Erica Tunick With people living longer, many will end up needing to be cared for at some point in time. Many are finding that life comes full circle and they ultimately end up caring for their parents the way they were cared for as children by their parents. Quite often this means moving a parent into your home and spending a great deal of your time as a caregiver, depending on the degree of care required. Believe it or not, just as caregiving often comes full circle, so do tax laws. Surprisingly, if you pay for more than half of the costs of caring for or supporting a parent and their gross income is less than $4,000 you can claim your parent as a dependent. Paying for more than half of a parent’s costs is not limited to money spent directly on medical expenses. It includes everything from the rent you could get for the room they stay in if it were rented to someone else, to the cost of food, utilities and general living expenses. As long as these combined costs surpass the amount a parent receives from any income by at least $1, including Social Security, they are eligible to be claimed as a dependent. That means you can then take a tax exemption and write off a large portion of the medical expenses for each parent cared for. In cases where caring for a parent requires an intensive amount of time, or prevents an individual from working, it is also possible that you can get paid through your state’s Medicaid program as their official caregiver or can pay another family member to do so. Such payments are usually the equivalent of what Medicaid would pay a professional caregiver from a home care agency, but they are not necessarily limited to care. In some cases, monetary support from Medicaid can be used to make any renovations necessary to a home to make it safe for an elderly person. Such support varies from state to state, so you’ll want to check out the requirements in the state where you reside. |
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