The information in this article is up to date through tax year 2019 (taxes filed in 2020).
Some adults may care for their elderly parents and qualify to claim them as a dependent on their tax return. This can provide the caregiver with additional credits, deductions, and tax benefits to help offset the cost of care.
“My parent is elderly. Do they need to file taxes?“
Your elderly parent might not be required to file. Look at their gross income, which includes any income they receive throughout the tax year that is not exempt. This does not typically include Social Security benefits. If their gross income amount is below the IRS threshold for their age and filing status, your parent will most likely not be required to file a tax return. Currently for a single filer over age 65 the gross income ceiling is $12,200. For married couples the ceiling is $24,400.
There are special situations that may require your parent to file even if their income is below the ceiling. For example, if they have more than $400 in income from self-employment they will be required to file.
Can I claim my parent as a dependent?
There are specific qualifications you and your parent must meet to claim them as a dependent.
Your parent must meet the income requirements set by the IRS if you want to claim them as your dependent.
To qualify as your dependent, your parent must not have earned more than the gross income limit for the specific tax year. This amount changes every year so be sure to look at the most updated numbers. It’s important to note that Social Security income does not usually count towards gross income, but if your parent has additional income from interest or dividends, a portion may be taxable.
You must provide more than half of your parent’s financial support during the current tax year to claim them as a dependent.
Compare the monetary value of support you provide to the amount of your parent’s income, including Social Security, to determine whether or not you meet the support requirements. Your support must exceed your parent’s income by at least one dollar.
Here are some tips to help you determine the monetary value of the support you provided to your parents:
- Calculate the fair market value of your parent’s room in your home
- Consider the cost of the food that you provide
- Add up the cost of utilities, medical bills, and general living expenses that you provide
For more information about who qualifies as your dependent, read Who Can I Claim as My Dependent?
How do I claim my parent as a dependent?
Once you have determined if you met all the qualifications, simply log into your TaxSlayer account, enter your personal information, and then enter your dependents information when prompted. You will need to enter their:
- Full name
- Social security number
- Relationship to you
Once you have entered them as a dependent, you will be eligible to claim certain credits and deductions, like the family tax credit.
Is there a tax credit for taking care of an elderly parent?
There are several credits and deductions that you may be eligible to take while you are a caretaker for your elderly dependent.
Medical and dental expenses deduction
Deduct your elderly dependent’s medical and dental expenses if you claim them as a dependent. You can deduct unreimbursed medical and dental expenses that exceed 10% of your adjusted gross income if you are itemizing your deductions.
Dependent Care Credit
Even though this credit is officially called the Child and Dependent Care Credit, you may be eligible to claim it if you paid another person to care for your elderly dependent while you were working. It is a nonrefundable credit.
To be eligible, you (and your spouse if you’re married) must earn income during the year and claim your parent(s) as your dependent(s). You must also identify your care provider by entering their name, address, and employer identification number or social security number. You cannot claim this credit if you file married filing separately.
You can claim up to $3,000 for in-home care expenses. If you support both your parents, the limit is $6,000.
Family Tax Credit
Even though your elderly dependents will not be eligible for the Child Tax Credit, they may qualify for the Family and Other Dependents Credit which is worth $500 per dependent. This is a nonrefundable credit introduced by the Tax Cuts and Jobs Act. It applies to most elderly and disabled dependents.
Your employer’s dependent care benefits
Your employer may offer a dependent care flexible spending account, which could cover care of elderly dependents.
If you use one of these plans, the IRS will exclude up to $5,000 of your income that you designate to put in a dependent care FSA account. You will not have to pay income taxes on this money.
Can I file as head of household when claiming my parent as my dependent?
Yes, you will be able to file as head of household if you meet the following requirements:
- You are not married
- You were responsible for more than half of the cost of maintaining your home for your parent during the tax year
- Your parent isn’t required to live with you
If you are able to choose head of household instead of single, you can receive a larger standard deduction that can help offset the cost of being a caretaker.
Can I file taxes for another person?
Yes, you can help another person file their taxes. It’s easy to do yourself online with TaxSlayer.
For more information on filing someone else’s taxes, read Filing a Tax Return for a Family Member (or Someone Other Than Yourself)