Can someone deduct the cost of a caregiver?

A fellow caregiver asked...

My mother has a personal caregiver, who works for her full time in her home. She pays the cost of about $4,000 per month out of her own income. Can she deduct the cost as a medical expense on her income tax?

Expert Answer

Michael Gilfix is a Fellow of the National Academy of Elder Law Attorneys (NAELA) and a Certified Specialist in Estate Planning by the State Bar of California. He was chosen as a Super Lawyer by his peers and has been a national leader in the fields of law, long-term care, tax, and asset protection for more than 35 years. He writes and lectures about these topics across the nation and is the primary author of Tax, Estate, and Financial Planning for the Elderly: Forms and Practice. He has successfully advised thousands of families about protective long-term care planning.

Yes, assuming that they are "qualified long term care services." To satisfy the IRS, you have to verify, primarily by a carefully written letter from her personal physician, that a) she is chronically ill, b) the services are provided in accordance with the physician's plan of care, and c) she required care and supervision to protect her from threats to her health and safety due, for example, to her diminished capacity. Her CPA will rely on Section 213 of the Internal Revenue Code in determining whether or not your mother's care qualifies.

Note: Physicians don't think about tax deductions when they care for their patients. Its OK to tell them about this opportunity and about the need for an appropriate letter or written plan.

Also, these expenses can only be itemized deductions if they exceed 7.5% of her adjusted gross income.