Are In-Home Care Services Tax-Deductible?

24 Nov 2021

Cutting expenses to save money can also be through a tax deduction. And one of the things you can consider is in-home care services. These items are possibly deductible in your annual taxes, depending on the specifics of the home care you get.

The high chance that your home care services are deductible expenses relies on the health matter of the care recipient. Paying for the medical costs like fees to healthcare providers are accepted. It also applies to doctors, therapists, nurses, and even in-home health caregivers. 

What makes home care a deductible expense?

Note that in-home health care is quite close to home care services. But they also have distinct differences. The former is for patients with moderate to high-level needs for aid at home, like those with chronic disease or cognitive impairment. The providers involved here are skilled and certified for medicine administration, such as in-home nurses. Meanwhile, home care services assist in essential personal care and home management activities. 

From the look of things, the expenses for having an in-home health care provider are most likely acceptable to deduct. Quite right, but there are more things to know. 

Your expenses should be specified or itemized, and tax-deductible items are not only about the care provider. It deals more with dental and medical-related services, according to IRS Publication 502. 

It also stated it is unnecessary whether a nurse provides care or not. But it should be similar to nursing services. Moreover, a patient can receive care services at one’s house or in a healthcare facility. Home care assistance for personal care such as bathing, eating, and toileting are also deductible. It is for as long as these connect to the physical and cognitive condition of the care recipient. Therefore, services like running errands and household management are generally non-deductible.

How much can you deduct?

Overall, the cost of your home care related to assisting care recipients can be considered a deductible medical expense. And the filers may include fees they pay for transportation of in-home care medical providers. You may also add the expense for the long-term care services. 

However, filers can only deduct medical or dental expenses that are not over 7.5% of their adjusted gross income.

Who is the person involved in tax-deductible expenses?

Equally, the factor to consider in a tax deduction related to in-home care services is the care recipient. It is expected that the tax filers, themselves, can ask for the break. However, they can also add the medical expense they paid for their spouse or dependent. 

The dependent can be a qualifying child or relative. A qualifying relative is a person who has been living with the tax filer for a year. And this one is not the spouse and qualifying child. Generally, these include a sibling, descendant, in-law, or step-family member—a parent, grandparent, auntie, or uncle. 

Note that there are also underlying requirements in declaring a dependent—for example, proof of age, income, or citizenship. Meantime, there are also different conditions for filing for multiple support.