How To Qualify For Caregiver Tax Credit

More than ever before, caregivers are faced with the challenges of supporting older adult loved ones at home. And providing dependent care for adults can be stressful, introducing emotional obstacles and financial strain. Fortunately, there are tax benefits to help offset some care expenses, such as the caregiver tax credit. 

However, eligibility rules can be somewhat confusing. If you provide support care or financial aid to a qualifying dependent, you may be able to make a caregiver credit claim on your federal taxes. 

Here’s a breakdown on how to qualify for caregiver tax credits, including what steps to take and common challenges you may encounter. 

What is the caregiver tax credit?

The federal Credit for Other Dependents (ODC) is designed for individuals who take care of qualifying family members other than their minor children. Some examples include:

• A parent with a chronic illness who relies on you for most monthly expenses
• A sibling with a disability who meets the income and support thresholds
• A grandparent who lives alone but depends on your financial support 

IRS dependent care rules require that you prove eligibility, which is based on the financial support you provide, not the number of hours you are there with your loved one. 

Key benefits of the caregiver credit:

The caregiver credit can offer several advantages, such as:

• Provides up to $500 in annual tax benefits
• May reduce the overall amount of taxes you owe
• Can apply even if your loved one does not live with you
• Works alongside medical expenses deductions when applicable
• Helps offset the cost of care expenses, like prescriptions or medical equipment 

Make sure to regularly review the latest IRS updates, as rules can change from year to year. You should speak to a tax professional before filing. 

Who qualifies as a “caregiver” for tax purposes? 

The IRS does not evaluate caregivers based on:

• Number of caregiving hours
• Level of physical or emotional care
• Whether you live with the person you care for

Instead, eligibility depends on whether you provide more than half of their financial support for the year. 

Here are some common caregiver relationships: 

• Adult children caring for aging parents
• Spouses supporting a partner with a chronic condition
• Relatives providing support care for a disabled sibling or grandparent 

If you cover the majority of their financial needs and they meet certain IRS tests, you may be able to claim them as a qualifying dependent. 

Requirements to qualify for the caregiver tax credit

Take a closer look at the five key criteria to qualify for the caregiver tax credit. 

1. Relationship requirement

First, the person you want to claim must be a qualifying relative, which includes:

• Parents
• Stepparents
• Grandparents
• Siblings
• In-laws
• Other IRS-approved relatives 

If you have questions about eligibility, consult a tax professional. 

2. Residency or support requirement

Your loved one doesn’t have to live with you to qualify as a dependent. To meet this requirement, you’ll need to provide more than half of the support your parent required within the calendar year. You can include any of these forms of support in your calculations:

• Rent
• Food
• Medical care costs
• Transportation
• Home modifications
• Prescription costs

Keep detailed records of these expenses for tax purposes. 

3. Income requirements for the dependent

Your dependent must meet the gross income test to qualify, meaning that they earn less than the IRS threshold in most cases. Their Social Security income does not typically count toward their gross income. 

4. Citizenship requirement

The person must be a U.S. citizen, U.S. national, or resident alien for you to claim them on your taxes as a dependent. Otherwise, you cannot claim them. 

5. The caregiver must not be claimed by someone else

Typically, you may run into this issue if another adult is attempting to claim the family member as a dependent for tax credit purposes. For example, if you and one of your siblings are splitting the costs of caring for an elderly parent, you must decide which one of you will claim them as a dependent. 

Examples of qualifying situations

Examples of situations that may qualify for a caregiver tax credit include:

• A daughter pays for 70% of her mother’s home health aid, medications, and rent
• A son supports his father, who lives in senior housing
• A spouse provides most financial support for a partner with a chronic condition
• A relative supports an elderly aunt whose only income is Social Security 

If you are unsure if you qualify, a tax professional can help. 

Examples of non-qualifying situations

Scenarios where a person would not be able to receive a caregiver tax credit include:

• The dependent’s income exceeds the IRS limit
• You provide less than half of their yearly financial support
• You care for someone emotionally but don’t financially support them
• The person you help is a neighbor or friend, not a qualifying relative
• Your sibling provides more support than you do 

If you attempt to claim a tax credit in one of these scenarios, it could delay your filing or result in an IRS audit. 

Deducting caregiver expenses (separate from the credit)

Even if you claim the caregiver tax credit, you may also qualify to deduct certain care expenses as line-item medical deductions.

When medical expense deductions apply

You must itemize deductions instead of taking the standard deduction. Here are some expenses you may be able to deduct:

• Doctor visits
• Medications
• Home care services
• Health aides
• Medical equipment
• Mileage for travel to medical appointments
• Home safety modifications 

Keep detailed receipts so that you can document how much you spent on each need. 

When the care recipient can be considered your dependent

If your loved one meets IRS criteria as a qualifying dependent, you may deduct any of their medical expenses that you paid. However, filling out the appropriate IRS forms can be tedious, so you may want to hire a tax preparer to do it for you. 

Common confusion points

One of the biggest points of confusion involves credits vs. deductions. A credit reduces how much money you owe in taxes. For example, a $500 credit would lower the amount you owe the IRS by that dollar amount. Deductions reduce your taxable income, but a deduction doesn’t result in a dollar-for-dollar decrease in what you owe. 

Another misconception is that your loved one has to live with you. While that is a common scenario, it’s not mandatory. Lastly, it’s important to differentiate between medical and non-medical expenses. Non-medical expenses, such as cleaning supplies and food, usually aren’t deductible. 

‍

Step-by-step: How to claim the caregiver tax credit

If you provide caregiver support, you may be eligible for a tax credit under IRS rules. Here’s how to claim it in four steps.  

Step 1 — Determine dependent status

Compare your situation to IRS rules to determine whether your loved one counts as a dependent. 

Step 2 — Gather documentation

Keep detailed records of anything that will support your filing status, including bank statements and receipts. 

Step 3 — Complete tax forms

Most caregivers use Form 1040, Schedule 3, and Form 2120. However, you may need additional forms. 

Step 4 — Consider professional tax advice

Tax professionals can help you with handling multiple caregivers and itemizing your deductions. They can also ensure the dependent qualifies so that your taxes are filed properly. 

Common mistakes caregivers make

Make sure to watch out for these common mistakes.

Not realizing an adult parent can be a dependent

If you care for an adult parent, they may count as a dependent. Use IRS rules to reduce your taxable income by claiming relevant expenses. 

Not tracking spending throughout the year 

You must be able to support any deductions you list on your IRS forms, which means keeping your receipts. 

Misunderstanding the support rule

For the purposes of the more than 50% of support rule, all living costs are included. However, you can only list medical expenses as itemized deductions. 

Assuming Social Security disqualifies the parent

Your parent may still qualify as a dependent, even if they receive Social Security income. 

Questions to ask a tax advisor (helpful for caregivers)

Consider asking your tax advisor these important questions:

• Does my parent qualify as a dependent?
• Which receipts should I keep? 
• Can I deduct medical expenses? 
• Should I take the standard or itemized deduction? 

An experienced tax advisor can help you cover all angles and take advantage of IRS tax deductions. 

Partner with Understood Care

Caregiving is rewarding, but between dealing with non-covered durable medical equipment (DME) like shower chairs and keeping up with paperwork and appointments, it can be stressful, too. However, you don’t have to manage it all alone. 

Understood Care helps family caregivers stay organized, manage healthcare tasks, and navigate complex decisions. Explore our caregiver services to get started with us today, and let our support network help you unlock benefits as a family caregiver.

Related Reading

• Home Care - Learn More
• Congress Extends Medicare Telehealth Coverage for Two Years
• How to confirm if your 2026 plan added or dropped a grocery, utility, or OTC benefit
• 2026 Maximum Out-of-Pocket Changes: Which Plans Updated Their Limits and What It Means for You

FAQs

What qualifies as a caregiver on taxes?

A caregiver must provide more than half of a qualifying relative’s financial support for the year. The IRS focuses on financial support, not the hours you spend providing care. 

What is the $5,000 caregiver tax credit?

The $5,000 caregiver tax credit is a proposed federal tax credit that has not been passed into law. If approved, it would be available as a non-refundable tax credit.

How to qualify for caregiver tax credit 2025?

The same IRS rules apply as in previous years. You must meet the income threshold, provide an eligible amount of support, and be providing said care to a qualifying relative. 

How do you claim the caregiver tax credit? 

File the appropriate tax forms, such as a Form 1040 and Schedule 3.