You can write off caregiver expenses on your taxes through one of two main routes, and sometimes both. If you pay for care so that you can work or look for work, the Child and Dependent Care Credit reduces your tax bill by a percentage of what you spent. If the care is medical in nature, you can deduct qualified costs as itemized medical expenses on Schedule A. A smaller $500 Credit for Other Dependents may apply when neither path fits. Which one saves the most depends on your income, the kind of care, and whether the person you support lives with you.
Who the Person You Care For Has to Be
Before any tax benefit is on the table, the person receiving care has to meet IRS rules. For the Child and Dependent Care Credit, that means your dependent child under 13, your spouse who cannot care for themselves and lives with you more than half the year, or another dependent (or a person who would be your dependent except for their income or filing status) who also cannot care for themselves and shares your home more than half the year.1Internal Revenue Service. Topic No. 602, Child and Dependent Care Credit
The IRS treats someone as unable to care for themselves if they cannot handle their own hygiene or nutrition, or if they need someone with them full-time for safety.1Internal Revenue Service. Topic No. 602, Child and Dependent Care Credit No physician’s certification is required, but keep medical documentation in case the IRS asks.
Claiming someone as a dependent generally requires meeting relationship, support, gross income, and residency tests. You must provide more than half of the person’s total support, and for a qualifying relative their gross income must fall below an annually adjusted threshold, around $5,200 in recent years.2Internal Revenue Service. Dependents3Internal Revenue Service. Understanding Taxes – Dependents
One useful exception: for the dependent care credit, a family member can still be a qualifying individual even if their income exceeds the dependency threshold, as long as they meet the other requirements and cannot care for themselves.1Internal Revenue Service. Topic No. 602, Child and Dependent Care Credit That matters most for a disabled parent whose Social Security or pension income would otherwise disqualify them.
The medical expense path is more forgiving on where the person lives. You can deduct qualifying medical costs for a relative who lives in a nursing home or assisted living facility, not just under your own roof, as long as you provide over half their support.
When Siblings Share the Cost of a Parent
If several adult children together support a parent but no single child provides more than half, no one passes the support test on their own. Form 2120, Multiple Support Declaration, fixes this. When the group together provides more than half the support, any member who personally contributed more than 10% can claim the parent as a dependent, provided every other eligible contributor signs a waiver giving up the claim for that year.4Internal Revenue Service. About Form 2120, Multiple Support Declaration Only one sibling claims the dependent in any given year, but the group can rotate the benefit.
The Child and Dependent Care Credit
This credit reimburses a percentage of what you pay someone to care for a qualifying person so that you (and your spouse, if married) can be employed or actively look for work. You claim it on Form 2441.5Internal Revenue Service. About Form 2441, Child and Dependent Care Expenses Qualifying costs include payments to day care centers, in-home aides, and other caregivers. School tuition above kindergarten does not count.
Expenses are capped at $3,000 for one qualifying individual or $6,000 for two or more.6Office of the Law Revision Counsel. 26 USC 21 – Expenses for Household and Dependent Care Services Necessary for Gainful Employment The credit is a percentage of those expenses, ranging from 20% to 35% based on adjusted gross income. AGI at or below $15,000 gets the full 35%. The percentage drops one point for every additional $2,000 of AGI until it hits 20% for AGI above $43,000.1Internal Revenue Service. Topic No. 602, Child and Dependent Care Credit A household with $50,000 AGI and $6,000 in expenses for two dependents lands at the 20% rate and a $1,200 credit. The credit is nonrefundable; it can zero out your tax but won’t generate a refund on its own.
Your qualifying expenses also cannot exceed your earned income. For married couples filing jointly, the limit is the lower-earning spouse’s income. If one spouse is a full-time student or is disabled with no earnings, the IRS treats that spouse as earning $250 a month with one qualifying individual, or $500 a month with two or more.7Internal Revenue Service. Form 2441 – Child and Dependent Care Expenses
Married filing separately usually blocks the credit. It’s still available if you lived apart from your spouse for the last six months of the year, your home was the qualifying person’s main home for more than half the year, and you paid more than half the upkeep of that home.8Internal Revenue Service. Publication 503 – Child and Dependent Care Expenses
How a Dependent Care FSA Changes the Math
If your employer offers a Dependent Care Flexible Spending Account, you can set aside pre-tax dollars for caregiving costs. The 2026 household cap is $7,500 for joint filers, or $3,750 if married filing separately. You can’t double-dip: expenses you exclude from income through the FSA reduce your creditable expense cap dollar for dollar.6Office of the Law Revision Counsel. 26 USC 21 – Expenses for Household and Dependent Care Services Necessary for Gainful Employment Put $5,000 through an FSA with two qualifying dependents, and only $1,000 of additional expenses ($6,000 minus $5,000) remains eligible for the credit. Contribute the full $7,500, and there’s no room left for the credit at all.
Higher earners usually come out ahead with the FSA because contributions avoid both income and payroll taxes. Lower-income households without FSA access get more from the credit. If both are available, run the numbers before open enrollment.
Deducting Caregiver Costs as Medical Expenses
When the care is medical, you can deduct qualifying costs as itemized medical expenses on Schedule A. Two hurdles apply. First, only the portion of your medical expenses that exceeds 7.5% of your AGI is deductible.9Internal Revenue Service. Topic No. 502, Medical and Dental Expenses Someone with $80,000 in AGI needs more than $6,000 in medical expenses before any of it counts. Second, itemizing has to beat the standard deduction. For 2026, the standard deduction is $32,200 for joint filers, $16,100 for single filers, and $24,150 for heads of household.10Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026, Including Amendments From the One Big Beautiful Bill This path works best when medical costs are large or when other itemizable deductions are already high.
What Counts as Medical Care
The dividing line is medical versus custodial. If the caregiver’s primary work is medical, such as administering medication, performing therapy, or monitoring a condition, the full cost qualifies. Purely custodial help like meal prep and bathing does not, and when a caregiver does both you need to reasonably allocate wages between them. The caregiver doesn’t need to be licensed; what matters is what they actually do.
Nursing Home and Assisted Living Bills
A nursing home stay is fully deductible, meals and lodging included, when the principal reason the person is there is to receive medical care. If they’re there mainly for custodial reasons, only the medical portion of the bill counts.9Internal Revenue Service. Topic No. 502, Medical and Dental Expenses Ask the facility to itemize medical charges separately from room and board.
Home Modifications for Accessibility
Capital improvements made for medical reasons can be deductible. Common accessibility work such as entrance ramps, widened doorways, bathroom grab bars, and stairway lifts typically doesn’t raise a home’s value, and the full cost is deductible. When an improvement does increase market value, only the amount by which cost exceeds the value increase is deductible. A $20,000 elevator that adds $12,000 in home value yields an $8,000 deduction.
Long-Term Care Insurance Premiums
Premiums on qualified long-term care policies count as medical expenses, but only up to age-based annual limits. For 2026:
- Age 40 or younger: $500
- Age 41 to 50: $930
- Age 51 to 60: $1,860
- Age 61 to 70: $4,960
- Age 71 and older: $6,200
The limits apply per person, so a spouse pays under a separate cap based on their own age. The premium still falls under the 7.5% AGI floor along with your other medical expenses.
Getting to Medical Appointments
Transportation to and from medical appointments for the person in your care is deductible. Drivers can use the IRS medical mileage rate of 20.5 cents per mile for 2026, plus tolls and parking, or deduct actual gas and oil costs for medical trips.11Internal Revenue Service. IRS Sets 2026 Business Standard Mileage Rate at 72.5 Cents per Mile, Up 2.5 Cents Bus, taxi, and ambulance fares qualify too.
The $500 Credit for Other Dependents
If you support a dependent who doesn’t fit the dependent care credit, maybe because you don’t work or the dependent doesn’t live with you, a separate $500 nonrefundable Credit for Other Dependents may still apply. It covers dependent parents, adult relatives, and other qualifying dependents regardless of age.12Internal Revenue Service. Understanding the Credit for Other Dependents Phaseouts start at $200,000 in income, or $400,000 for joint filers. It stacks with the dependent care credit and the earned income credit when you qualify for those separately. Small, but easy to miss when adult children support aging parents who meet the dependency tests.
Records You Need to Keep
Form 2441 asks for the care provider’s name, address, and taxpayer identification number (SSN or EIN).13Internal Revenue Service. Child and Dependent Care Credit Information Missing the TIN gets the credit denied unless you can show a good-faith effort to obtain it. A provider who won’t share their number is a red flag; the IRS uses that number to confirm they’re reporting the income. Keep canceled checks, bank statements, or app records for every payment.
For medical deductions, save itemized receipts from every provider and facility. When claiming in-home care as medical, a physician’s letter describing the condition and confirming the medical necessity of the services strengthens the claim considerably. Without it, the IRS can reclassify the expense as nondeductible personal care. For nursing home costs, keep the facility’s itemized statements. For home modifications, hold onto contractor invoices and any appraisals showing before-and-after value.
The Household Employment Tax Trap
If you pay an in-home caregiver $3,000 or more in cash wages during 2026, that person is your household employee and you must file Schedule H with your return.14Internal Revenue Service. Publication 926 – Household Employer’s Tax Guide Schedule H covers Social Security, Medicare, and federal unemployment taxes. It applies whether the caregiver is full-time or part-time, and it’s on top of any credit or deduction you claim. Skipping it is one of the most common mistakes in this area, and the penalties can outrun the tax benefit you’re claiming. Build these payroll obligations into the cost of hiring from the start.