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Tax Benefits of Caring for Adults

Tax season is here. You likely know that you can take a tax deduction for having minor children in your home, but did you know that many of the same benefits apply to taking care of an adult in your home?

Many people provide for their elderly relatives, and may be eligible for tax deductions they aren’t taking.

If you’re currently taking care of an adult or may need to care for an adult in the future, read on.

Most often, the adult who is claimed as a dependent is a relative, such as a parent. However, if you are caring for an unrelated adult and they live in your home for the entire year, you may be able to claim them as a dependent on your taxes.

If you are caring for an adult who is not a relative, check the IRS requirements very carefully before you claim any tax relief for being a caregiver. Be certain you meet the requirements; if the IRS determines you were not eligible for the deduction you claimed, you will have to repay them with interest.

These are the requirements for a non-child to be claimed as a dependent:

  1. You cannot be claimed as a dependent on someone else’s tax return. Neither can your spouse, if you filed a joint tax return. A dependent can’t have a dependent in the eyes of the IRS.
  2. The adult cannot be married and file a joint tax return.
  3. The adult must have lived with you for the entire year.

  4. The adult cannot be a claimed as a qualifying child on someone else’s return, including yours. A dependent can only be counted once.

  5. The adult’s gross income must be less than $4,050 for 2017.

  6. You must have provided 50% or more of the adult’s financial support for the year.

  7. The person cannot be employed as your maid, housekeeper, or similar service provider. Your non-family employees can’t be claimed as dependents.

It is possible to receive some tax relief when caring for an adult, even if that adult is not related to you. However, the IRS looks very closely at these types of deductions and credits. Be sure that you really qualify, because there is an excellent chance that your claim will be scrutinized, sooner or later.

Caring and providing for an adult is a big responsibility, both personally and financially. Be sure to contact a tax professional to help you wade through the details if you intend to claim a deduction you haven’t claimed before.

 

We are not professional tax advisors, but we deal with tax issues for many people during the bankruptcy process. Tax mistakes such as claiming a deduction to which you are not entitled can have high costs down the road. This article is intended only to make you aware of a potential tax deduction. You should consult with a tax professional before making decisions for your personal situation.

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