"Elder care" is broad term that encompasses a variety of services, from part-time in-home care to assisted living facilities. Nearly all elder care services are tax deductible, but whether you are eligible to take that deduction depends on many factors, including who pays for the service, where the elder parent lives and whether she is your dependent. If you're eligible to take the tax break, you can choose to claim elder care either as a medical expense or as dependent care.
If your mother is your dependent, you are eligible to deduct elder care as either medical expenses or dependent care, subject to IRS rules on the nature of the care. To have your mother qualify as your dependent, your must pay at least half of your mother's support, whether she lives with you or in a separate home, which can be a nursing or assisted-care facility. Her taxable income must be below $3,800. Social Security does not count as taxable income, although it does count as support that she provides herself. If your mom has an IRA or other taxable retirement income over the $3,800 limit, you won't be able to claim any of her elder care expenses, no matter how much you spent for her care.
Dependent Care Credit
If your mother lives with you and is physically or mentally unable to care for herself, you can claim any elder care expenses paid so that you -- and if you are married, your spouse -- can work or attend school. Even if your mother earns too much to qualify as your "dependent," if you pay more than half of her living expenses you can take the credit. You can claim up to $3,000 of your expenses, but the amount of the credit is based on a percentage of your expenses and depends on your adjusted gross income. The maximum you might receive is $1,050.
Medical Expenses Deduction
If your mother is your dependent, you can claim any medical expenses that you paid for her that were not reimbursed by insurance, including any elder care expenses. This allows you to deduct a wider range of expenses, including long-term care and nursing services. There is no limit to the amount of medical expenses you can deduct, but as of 2012, only the amount over 7.5 percent of your AGI is deductible. Beginning in 2013, you are limited to deducting only the amount greater than 10 percent of your AGI.
How to File
For a dependent parent, you can claim elder care along with your own medical expenses on Schedule A of Form 1040. You have to itemize your deductions to qualify. You must file Form 2441 to take the dependent care credit.
Naomi Smith has been writing full-time since 2009, following a career in finance. Her fiction has been published by Loose Id and Dreamspinner Press, among others. She holds a Master of Science in financial economics from the London School of Economics and a Bachelor of Arts in political economy from the University of California, Berkeley.