Taking care of an older adult, disabled spouse, or other family member can, for some, be as rewarding as it is challenging. Giving your loved one a safe and secure environment is often crucial for their quality of life. But the physical and emotional toll as well as the daily financial costs of caregiving might be daunting.
AARP estimates family caregivers spend an average of about $7,200 per year on out-of-pocket costs for dependents. And that’s not counting the time you can’t work (or maybe work a full schedule) while caring for someone.
Some tax deductions provide relief for childcare. But what about adults? Fortunately, the IRS (and some states) offer several tax breaks for dependents 18 or older that you, as the caregiver, might be eligible to claim on your taxes.
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So, let’s look at “qualifying relative” requirements before covering some potential adult dependent care tax breaks.
Qualifying relative test
A caregiver may claim a qualified dependent, like a parent, spouse, or other qualifying relative if all the following conditions are met:
- The dependent is a U.S. citizen, “resident alien,” or resident of Mexico or Canada.
- You paid over half the support for your relative during the tax year.
- You or your relative are not qualifying dependents of another taxpayer.
- The relative lives with you all year as a household member (this rule does not apply to specific relatives, including parents.)
- Your relative’s gross income for the tax year must be less than $5,050 (Social Security income might be excluded if exempt from taxable income).
Additionally, you can’t claim your spouse as a dependent if you file jointly. Also, qualifying relatives shouldn’t file and claim a dependent on their taxes, if they are already a dependent on yours. See the IRS website for further eligibility requirements regarding dependents.
Federal Tax Breaks for Caregivers of Adults
IRS Tax credit for other dependents
If you’re a caregiver of a qualifying relative, you may be eligible for the Credit for Other Dependents (ODC). This is a non-refundable tax credit for caregivers who can’t claim the child tax credit or additional child tax credit for their dependents.
The maximum credit amount for the ODC is $500 per qualified person. However, the credit is reduced if your adjusted gross income (AGI) exceeds $200,000 for single filers ($400,000 for married filing joint couples).
Use the Interactive Tax Assistant on the IRS website to check your eligibility for this tax credit.
Child and dependent care tax credit for adults
The child and dependent care credit (CDCC) may be available if you paid someone to care for a qualifying relative. To qualify for the CDCC, you (and your spouse) must have:
- Lived in the U.S. for over half the year (exceptions may apply to military personnel).
- Paid someone to care for your dependent so you (and your spouse, if filing jointly) could work or look for employment.
- Paid expenses for the care of a qualifying relative who was incapable of self-care and who lived with you for more than half of the year.
The credit’s value is based on your income and a percentage of the expenses you incurred to care for your dependent. The maximum credit is worth $3,000 for one qualifying person or $6,000 for two or more.
You might be able to claim tax credits for your adult parent dependent.
Caregivers may claim medical expenses for their parents
If you paid medical expenses for a qualifying relative, you may be eligible to deduct those costs on your tax return. Caregivers can claim the medical expense tax deduction for qualified costs only. This deduction requires you to itemize instead of claiming the standard deduction.
Here are a few examples that may qualify for the medical expense tax deduction:
- Out-of-pocket costs for doctors, dentists, optometrists, and other medical professionals.
- Hospital stays or health insurance and Medicare premiums.
- Prescription drugs, insulin, glasses or contact lenses, hearing aids, and dental work.
- Long-term care costs, like in-home care or assisted living.
- The cost of a service dog.
- Certain tax-deductible home improvements for retirement.
However, medical expenses are deductible only to the extent that costs exceed 7.5% of your adjusted gross income (AGI). Also, you should maintain all receipts for medications, appointments, and other items for which you wish to claim the deduction.
Who qualifies as head of household?
Unmarried taxpayers may qualify for the head of household filing status. Unlike single filers, who can claim $14,600 as a standard deduction, heads of household can claim $21,900. If you qualify for head of household filing status, you may also fall under a lower tax bracket versus filing single.
Here are the eligibility requirements for head-of-household tax filers:
- Unmarried, single filer as of December 31 in the applicable tax year.
- Pay more than half of the cost of keeping up your home.
- Pay more than half the cost of keeping up your parent’s home (even if your parent did not live with you). (If you claim a non-parent dependent, they must live with you to qualify for head of household filing status).
Additionally, any money an aging parent gives you to offset their expenses isn’t counted as taxable income. Instead, this amount is counted as funds your parent paid for their own support (and may be applicable in determining whether you paid for “more than half the cost” for their care in the tax year).
Other Ways to Save on Caregiver Costs
Adult care: Tax-advantaged health accounts
As a caregiver, you could incur significant medical costs for your adult dependent. Fortunately, there are savings accounts for these (sometimes unexpected) costs.
- Flexible spending account (FSA), OR
- Health savings account (HSA).
While both FSAs and HSAs offer a way to save for medical costs, each account has slightly different eligibility requirements. Also, depending on your tax situation, one account may be more advantageous to you. Consult with a qualified tax professional to determine the best option.
FSA and HSA are two healthcare options for adult dependent care.
Can I use my FSA to pay for dependent care?
Flexible spending accounts (FSAs) are tax-advantaged savings accounts that help cover immediate (within a year) medical costs. For instance, if you know your dependent parent has a root canal coming up but is otherwise healthy, you may open an FSA to save for that expense.
FSA contributions are taken tax-free from your paycheck. In 2025, you can contribute the following to a valid FSA plan:
- Up to $3,300 if single.
- Up to $6,600 if your spouse has a separate plan.
But you lose your contributions if you don’t withdraw the money for qualified expenses within the plan year. So you’ll want to get an estimate for upcoming medical costs before contributing to an FSA account.
To open an FSA, your employer must offer the account as part of their employee benefits package. Self-employed taxpayers do not qualify.
HSA family plan may provide caregiver tax savings
Health savings accounts (HSAs) are tax-advantaged savings accounts that help cover long-term (more than a year) medical costs.
For example, you may use an HSA if your qualified dependent has a chronic illness that requires repeated medical treatments over multiple years. HSAs allow you to roll funds indefinitely to pay for qualifying medical expenses. This gives you more flexibility in when to use the funds than a FSA.
You may also benefit from the HSA’s “triple tax advantages:”
- Contributions are tax-deductible.
- Investments grow tax-free.
- Qualifying withdrawals are tax-exempt.
You can contribute up to $8,550 in 2025 to a valid family-coverage HSA plan.
To open an HSA, you must enroll in a high-deductible health plan (HDHP) (either with or outside your employer). Self-employed taxpayers must find a financial institution that offers HSAs and enroll in an HDHP. You cannot contribute to an HSA if you’re enrolled in Medicare.
Dependent adult state tax breaks
The tax breaks described above apply to federal taxes. However, states may also offer tax benefits for caregivers.
For example, Maryland’s Caregiver Expense Grant Program reimburses caregivers for 30% of qualifying expenses of more than $2,000 annually, up to a maximum of $2,500 (income limits apply). Oklahoma provides up to $2,000 for its “Caring for Caregivers” tax credit or $3,000 for those caring for veterans or individuals with dementia (income limits must be met).
So be sure to check out your state’s Department of Revenue or Grants Management websites for any applicable tax credits, grant programs, or savings available to you.
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