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? These benefits can even apply when the adult is not your spouse.
If you’re currently taking care of an adult or may need to care for an adult in the future, read on.
The adult in question could be a spouse or a parent; it could also be an in-law, friend, or any other non-relative. As with everything else, the IRS has requirements that you must meet before you can claim any tax relief for being a caregiver. Be certain you meet the requirements; the IRS is a real stickler on the adult care claim.
You can claim an exemption for each dependent – adult or child – that you meet the requirements for.
These are the requirements for a non-child to be claimed as a dependent:
- 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.
- The adult cannot be married and file a joint tax return.
- The adult must have either lived with you for the entire year or meet the IRS’ requirement for ‘relatives that do not have to live with you’. See the latest IRS information on these exceptions.
- The adult cannot be a claimed as a qualifying child on someone else’s return, including yours. A dependent can only be counted once.
- The adult’s gross income must be less than $3,700.
- You provided 50% or more of the adult’s financial support for the year.
- The person is not employed as your maid, housekeeper, or similar service provider. Your non-family employees can’t be claimed as dependents.
- The adult must be a US citizen, Canadian or Mexican resident, US National, or resident alien.
Dependent Care Tax Credit
Up to 35% of the cost of your dependent’s expenses for care can also be claimed as a tax credit (a credit is much better than a deduction), if the expenses allowed you to work or to look for work. Of course there are several requirements for this, as well.
Unless it is your adult child or spouse, the adult must not have been able to care for himself due to physical or mental deficit.
They must also have lived with you for more than 6 months and either be your dependent or would have been your dependent except one or more of the following reasons:
- Their income was over the $3,700 limit.
- The adult filed a joint return.
- You or your spouse, if filing jointly, could be claimed as a dependent on another’s return.
It is possible to receive some tax relief from caring for an adult, even if that adult is not related to you. However, be warned; the IRS looks very closely at these types of deductions and credits. Be sure that you qualify, because there is an excellent chance that it 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. You must keep specific records to prove your eligibility for the tax benefits or the deduction won’t be allowed. Plan ahead and enjoy some relief on your taxes.