Are You a Caregiver? Discover Ways to Cut Your Tax Bill

Almost 44 million Americans care for someone 50 years or older, spending about $5,500 a year providing that care. If you’re one of them, you may be entitled to a tax break by claiming the care recipient as a dependent on your tax return. However, there are some eligibility requirements:
  • The recipient must be either a relative (living with you or alone) or a nonfamily member who has lived with you for the past year.
  • The recipient must have an annual gross income, excluding Social Security benefits, of less than $3,650.
  • You must provide more than half of the care recipient’s annual financial support.
If the care recipient lives with you, you can include in your financial support calculation that person’s share of your mortgage, utilities and other housing-related expenses. If several people in your family together provide more than half of the care recipient’s financial support for the year, you may be able to file a “multiple support declaration” on IRS Form 2120 so one person can claim the entire dependent exemption. Caregivers who are not eligible due to the $3,650 income requirement may be eligible for a dependent-care credit of as much as $1,050 via IRS Form 2441.
The legal and tax information contained in this article is merely a summary of our understanding and interpretation of some current provisions of tax law and is not exhaustive. Consult your legal or tax counsel for advice and information concerning your particular circumstances. Neither we nor our representatives may give legal or tax advice.

Almost 44 million Americans care for someone 50 years or older, spending about $5,500 a year providing that care. If you’re one of them, you may be entitled to a tax break by claiming the care recipient as a dependent on your tax return. However, there are some eligibility requirements:

  • The recipient must be either a relative (living with you or alone) or a nonfamily member who has lived with you for the past year.
  • The recipient must have an annual gross income, excluding Social Security benefits, of less than $3,650.
  • You must provide more than half of the care recipient’s annual financial support.

If the care recipient lives with you, you can include in your financial support calculation that person’s share of your mortgage, utilities and other housing-related expenses. If several people in your family together provide more than half of the care recipient’s financial support for the year, you may be able to file a “multiple support declaration” on IRS Form 2120 so one person can claim the entire dependent exemption. Caregivers who are not eligible due to the $3,650 income requirement may be eligible for a dependent-care credit of as much as $1,050 via IRS Form 2441.
The legal and tax information contained in this article is merely a summary of our understanding and interpretation of some current provisions of tax law and is not exhaustive. Consult your legal or tax counsel for advice and information concerning your particular circumstances. Neither we nor our representatives may give legal or tax advice.