How to Qualify for a Caregiver Tax Credit

Being a caregiver for a loved one is rewarding, because you’re ensuring the health and safety of someone you care about.

But the expenses can become hefty. You may have to pay for medication, medical equipment, and basic items your loved one needs. And, you might not be able to get a job, because caring for your loved one takes up too much time.

Any kind of financial aid would be helpful. That’s why it’s important to know how to qualify for a caregiver tax credit. The monetary support you receive can help you provide the best care.

What Is the Caregiver Tax Credit?

A caregiver is someone who takes care of a loved one (including family members and friends) to keep them from having to go to a nursing facility or an assisted living facility.

The Caregiver Tax Credit is not just a single credit a caregiver receives. It’s a combination of existing tax benefits, and potential new legislation, that you can claim on your tax return.

These tax credits can help caregivers manage the financial strain of providing care. A tax credit helps reduce the amount of taxes owed to the federal government.

How to Qualify for a Caregiver Tax Credit: Important Requirements

According to an American Association of Retired Persons (AARP) study, the average caregiver pays more than $7000 a year in out-of-pocket expenses for routine, caregiving expenses.

That’s a lot of money. In order to help with the cost, the government has provided some relief through tax credits and deductions. Here are some of the ways:

Child Tax Credit for Other Dependents

If you are caring for a relative, you may be able to claim this relative as a dependent. To have a qualifying child or qualifying dependent for this tax credit, you need to meet the following requirements:

• No one should claim you as a dependent on a tax return.
• You should have paid for more than half of your loved one’s support for the year.
• You can’t file a joint return with your spouse unless you’re claiming a refund in a specific tax situation.
• The person, for whom you’re a caregiver, must be a parent, grandparent, stepparent, or another direct relative, such as an uncle or an aunt. If you’re a foster parent, you do not fit into this category unless your foster children have lived with you all year.
• Your loved one should be an American citizen, American national, American resident alien, or a Mexican or Canadian resident.
• Your income must be less than $5,050 – this is the figure to use if you’re filing for your 2025 income.
• The loved one, who you’re claiming as a dependent, should not have a dependent.

Child and Dependent Care Credits

Another useful option for caregivers is the Child and Dependent Care Credit, which helps offset care-related expenses.

You may be able to claim this tax credit if you paid for someone to care for your child or another qualifying dependent so you (and your spouse if you’re filing jointly) could have the time to attend a college or a university, work, or look for work.

If you claim the credit for the caregiving expenses of your child (or other dependent), the credit would reduce your federal income tax.

You would be eligible to claim this credit if you met the following requirements:

• You paid the caregiving expenses for a qualifying individual to enable you (and your spouse if filing a joint return) to work or to look for a job. (Working can also include attending a college or a university.)
• You (or your spouse if you’re filing jointly) lived in the United States for more than half a year. (There are special rules that apply to military personnel who are stationed outside of the country.)
• You also must be caring for a person who is generally a dependent under the age of 13, a spouse, or a dependent of any age who is not able to care for him or herself and who lives with you for more than six months.

Tax experts calculate this credit based on the caregiver’s income and a percentage of the expenses incurred from taking care of the individual while you are working, looking for work, or attending school.

There are also situations where a person can claim a friend or an “honorary auntie” as a dependent, but the care recipient must have lived with you for at least six months of the year.

Earned Income Tax Credit

A third option for a tax credit could be the Earned Income Tax Credit (EITC). This is a tax credit for low- to moderate-income, working-class individuals and couples, especially those who have children. This credit helps provide $60 billion in benefits to about 31 million households.

Many people who are eligible for EITC benefits are likely to be a caregiver for an older adult and may also have children at home too. Research has also illustrated that the caregiving work usually falls on the shoulders of the care recipient’s daughters, specifically their unmarried daughters.

Sometimes, there’s a family of caregivers taking care of the loved one, and these relatives want to split the credit. However, only one person can claim a person on a tax return. IRS professionals say these relatives can take turns claiming an individual each year.

Caregivers may still qualify for the EITC even if the caregiver is not a parent.

To be eligible, the caregiver must meet the following requirements:

• Have an earned income.
• Have an investment income which is below the limit requirement.
• Have a valid Social Security by the time you send the tax return
• Be a U.S. citizen or a resident alien for an entire year.
• DO NOT FILE a Form 2555, Foreign Earned Income.
• You will need to maintain certain rules if you are separated from your spouse and you’re not filing a joint tax return.

The EITC provides special qualifying rules for these groups:

• Military members
• Clergy members
• Taxpayers and their relatives with disabilities

Medical Expenses

Caregivers may also be able to get reimbursed for medical expenses through a tax deduction. However, to get the tax deduction, these medical expenses must cost you more than 7.5 percent of your adjusted gross income. (Your AGI is your total, or gross, income from all of your services.)

As an example, if your AGI is $100,000, then the first $7,500 you pay for medical expenses are not tax deductible. So, if you paid a total of $25,000 on medical expenses, you can deduct $17,500 for that same tax year.

Medical expenses that are tax-deductible include:

• Home modifications (examples: wheelchair ramps, grab bars)
• Hiring a personal attendant for those who are not able to perform activities of daily living (ADL).
• Assisted Living Costs
• Travel to doctor or medical appointments and therapy.
• Prescriptions and necessary medical equipment.
• Diagnostic tests.

Here is a detailed list of all acceptable deductions.

Are There Other Tax Credit Options

There are state-specific programs that can offer tax relief. To find out more, you would need to contact your state’s Department of Revenue.

Advice for Filing Your Taxes

Some common rules to use when completing your tax preparations include:

• Keeping detailed records.
• Keep all receipts, whether on a physical copy or in electronic form.
• Use a dedicated calendar or digital log to track caregiving expenses. This will help you claim eligible deductions and protect you in case of an audit.

High Hopes for New Legislation

Congress is also looking to pass new legislation which would provide more tax credits for caregivers. On March 11, 2025, a bipartisan group of U.S. Senators and House of Representative members reintroduced legislation. If this legislation passed, it would provide assistance in the form of a federal tax credit for eligible working family caregivers.

The legislation is called the Credit for Caring Act. If it passed, the new law would provide up to a $5000 nonrefundable federal tax credit for eligible working family caregivers, that would cover 30% of qualified expenses they incurred above $2000.

In order to get the credit with this legislation (if passed), the care recipient does not have to live in the same house. To seek the credit, the caregiver should have accumulated expenses while taking care of the individual. This credit is not to be used as payment just for taking care of the loved one.

Unlike the credit for a dependent, the caregiver needs to have an earned income of more than $7,500. But the credit will phase out for caregivers who have a higher income, fully phasing out at $125,000 for an individual and $200,000 for those filing jointly.

The maximum amount a person could receive for this credit is $1,050 for one dependent or $2,100 for two or more. For instance, if you are paying $2,500 for an adult care for your loved one with Alzheimer’s Disease, you can receive up to $1,050.

As of September 3, 2025, the legislation is still at the committee level.

Alternatives to Tax Credits

Tax credits are not the only way to get financial support. There are other options that a caregiver can explore too.

For instance, caregivers can look into Medicaid and Medicare options. American veterans may get assistance through the U.S. Department of Veterans Affairs. The federal Family Medical and Leave Act (FMLA) may also be another choice. Other options could include respite care services or local caregiver support programs.

Final Taxing Thoughts: Maximize Support While You Give Care

Being a caregiver is a selfless and demanding role, but you shouldn’t have to carry the financial burden alone. Understanding how to qualify for a caregiver tax credit opens the door to valuable financial relief, whether through federal tax credits, deductions, or state programs.

From the Child and Dependent Care Credit to the Earned Income Tax Credit and medical expense deductions, these benefits are designed to help you offset the real costs of care.

If you’re unsure about your eligibility or how to file, consider speaking with a tax professional. Every dollar saved can ease your financial burden and help you give your loved one the care he or she deserves.

All American Home Care is one of the country’s leading providers of compassionate, high-quality home care services. We offer a deep commitment to personalized care, professionalism, and community trust, and our team ensures each patient receives the attention and respect they deserve.