Caregiver Tax Credits: 4 Tax Breaks That Can Offset the Cost of Caring

Caring for someone after a stroke or brain injury costs real money. The Long-Term Services and Supports State Scorecard reports that family caregivers spend about $7,200 a year out of pocket on average.

Many caregivers pay for home care, equipment, rides to therapy, and home changes, often while working less and many people don’t realize that some of these costs can lower their tax bill.

The good news is that it can because the tax code has a few tools that may help. In this article, we’ll cover four tax breaks that caregivers may qualify for, who may qualify, and what to ask a tax professional about your individual situation.

One thing to note before we jump in is that we are a rehab company and not tax advisors. The tax rules change each year and depend on your situation so use this guide to know what to ask but always check the details with a tax professional or somebody that knows your individual situation.

The Four Tax Breaks for Caregivers at a Glance

While each tax break for a caregiver might work a little differently, here is a quick overview of what each one does.

• Credit for Other Dependents: A $500 credit if you can claim your loved one as a dependent.
• Child and Dependent Care Credit: A credit for care costs that let you work, including adult day care for someone who cannot care for themselves.
• Medical expense deduction: A deduction for medical costs above 7.5% of your income, if you itemize (i.e. list things individually, one by one, with specific details rather than grouping them together as a single total)
• State credits: A few states offer their own caregiver credits which we can jump into.

One quick piece of terminology to explain.

A credit lowers your tax bill dollar for dollar while a deduction lowers the income you pay tax on. For example, if you make $50,000 per year then a deduction will lower that amount (so you pay a lower tax bracket) while a credit will directly lower the taxes you pay.

The credits are often more valuable, but the best choice depends on your numbers.

Can Caregivers Claim a Loved One as Dependent?

Several of the caregiver tax credits we will discuss depend on whether your loved one counts as your dependent and this is where many caregivers can get stuck. An adult parent, spouse, or relative can qualify as a dependent but but the IRS sets several tests to determine whether or not they will.

For a relative who is not your child, the main tests look like this:

• Income: Their gross income must stay under a yearly limit. The limit was $5,200 for 2025 however this changes most years so just check on the IRS website.
• Support: You generally pay for more than half of their total support for the year.
• Relationship: They must be related to you or live with you all year as a member of your household.

People with disabilities can qualify as dependents at any age. There are some other rules apply too, such as citizenship and residency so ask your tax professional to confirm your loved one qualifies before you file.

One thing a lot of people miss here is that pensions, interest and other taxable income can push your loved one over the income limit so make sure you add up all their income for the year before you assume you can claim them.

Caregiver Tax Credits: 4 Tax Breaks To Offset the Cost of Caring

Ok now that we’ve covered some of the basics, let’s jump into some of the different tax credits a caregiver might be able to use in order to offset the cost of caring.

1. The Credit for Other Dependents

This is the simplest break on the list.

Say you claim a dependent who does not qualify for the child tax credit. You may get a credit of up to $500 per dependent.

This is where a parent or adult relative with a disability often fits.

The credit starts to shrink when your adjusted gross income (AGI) goes above $200,000, or $400,000 if you file jointly. Your loved one also needs a valid Social Security number or taxpayer ID, and they must be a U.S. citizen, national, or resident alien.

You do not need to pay for any care in order to claim this credit, you only need to meet the dependent rules which makes this an easy one worth checking even if you pay little out of pocket.

2. The Child and Dependent Care Credit

Despite the name, this credit is not only for kids. You may claim this credit if you paid for care so you could work or look for work. Additionally, your spouse must be working or looking too, if you file jointly.

The care can be for a disabled spouse or dependent of any age who cannot care for themselves.

Who counts as a qualifying person

The IRS describes this person as unable to care for their own hygiene or nutrition. They may also need full-time attention for their own safety and they must have lived with you for more than half the year. After a stroke or brain injury, many survivors meet this description, but not all do so that is one thign to be mindful of here.

What care counts

Adult day care centers for disabled individuals qualify. So does a paid aide who comes to your home so you can go to work. Food, lodging, clothing, and entertainment do not count.

In addition, you cannot pay your spouse, your dependent, or your own child under 19 and claim the credit for that care.

How much you can claim

Care costs are capped at $3,000 for one qualifying person or $6,000 for two or more. The credit is a percentage of those costs and that percentage is rising. Starting with the 2026 tax year, the top rate goes up to 50% for lower incomes. It then phases down as income rises.

Kiplinger reports the maximum credit rises to $1,500 for one person and $3,000 for two or more.

One catch is that tax-free dollars from a dependent care account at work reduce the costs you can use for the credit. The yearly limit on those accounts rises to $7,500 in 2026. In order to figure out which route will save you more over the year, talk with a qualified tax professional.

3. The Medical Expense Deduction

This tax tip is a deduction, not a credit (remember what that means above), however it can still matter a lot after a stroke when costs add up fast. In order to take advantage of it you must itemize each medical expense that qualifies throughout the year. In other words, track them on a sheet somewhere separately from all other expenses and make sure you have receipts.

You can deduct only the part of your medical costs that is more than 7.5% of your AGI.

Costs for your spouse or any dependent count here and remember that costs your insurance pay back should not get listed.

Costs that may qualify

IRS Publication 502 lists many expenses that stroke and brain injury caregivers face that would qualify for this including:

• Nursing services: Wages you pay for care such as bathing and grooming, at home or in a care facility.
• Home changes: Ramps, railings, and wider doorways. The cost is reduced by any increase in your home’s value.
• Wheelchairs: The cost to buy, run, and maintain one.
• Trips to care: Parking, tolls, and mileage at the IRS medical rate. That rate was 21 cents a mile in 2025.

Some of these items help your loved one do a task today, like a ramp or a wheelchair. Others support the work of recovery, such as therapy visits. Both can matter, and both may count.

If you want ideas for the practice side, see our guide on supporting stroke recovery home practice as a caregiver.

4. State Caregiver Tax Credits

A few states now offer their own credits for family caregivers. A 2023 review found six states with them: Georgia, Missouri, Montana, New Jersey, North Dakota, and South Carolina.

Others may have added credits since then, so check your state’s tax agency or again a qualified tax professional.

Nebraska is a good example of how these work. Its Caregiver Tax Credit Act covers 50% of eligible costs, up to $2,000. The cap is $3,000 for a family member who is a veteran or has dementia. Eligible costs include home changes, equipment, home care aides, respite care, and adult day care.

Remember though, rules like income limits and provider paperwork vary by state. For instance in Nebraska, a licensed health provider must certify that your loved one needs help with at least two daily activities.

Look up your state’s rules early so you can collect the right forms and be prepared for tax season.

What Records to Keep to Get the Most Out of Potential Caregiver Taxe Credits and Deductions

We promise that good records will make your tax time so much easier and quicker, especially if you are doing it yourself. Start a simple folder now, use a spreadsheet, whatever you need to do to easily keepy track of things.

Here are a few things to keep to get the most out of potential caregiver tax credits and deductions:

1. Receipts and invoices: Keep them for aides, adult day care, equipment, and home changes.
2. Provider details: Save the name, address, and taxpayer ID of anyone you pay for care. You will need these for the care credit.
3. A mileage log: Write down the date, place, and miles for each trip to therapy or appointments.
4. Doctor letters: Ask for a note that explains why a ramp, rail, or piece of equipment is medically needed.
5. Proof of support: Track what you pay for housing, food, and other needs for your loved one.

Questions to Bring to a Tax Professional to Claim Caregiver Credits

Many tax professionals will offer a free assessment for your situation throughout the year… take advantage of that! You do not need to be a tax expert to benefit from these credits and deductions, you just need to know which questions to ask.

Here are a few to help you get started:

• Can I claim my loved one as a dependent this year, given their income?
• Which saves me more: the care credit, a work dependent care account, or both?
• Do my costs add up enough to make itemizing worth it?
• Do any of our home changes count, and how do I figure out the home value part?
• Does our state offer a caregiver credit, and what forms does it need?

Moving Forward

Caring for someone after a stroke or brain injury is hard work, and the costs are real. Tax breaks will not cover everything, but they can ease the load.

Remember that rules shift each year so use the above as a guide and check with a tax professional as 15 minutes will be time well spent to educate yourself and get an assessment on your situation.

Now some homework for you — set up a system to track all expenses including receipts and details. Bring them and your questions to your next tax appointment and start the savings!

We hope you enjoyed this article and subscribe to our newsletter for weekly articles just like this delivered straight to your inbox — subscribe here.

Here are some additional articles you might be interested in:

1. How to Prevent and Overcome Caregiver Burnout: Recommended Resources and Strategies: Spot the warning signs early and build support before exhaustion takes over.
2. How to Support Stroke Recovery Home Practice as a Caregiver Without Needing to Become the Therapist: Learn five ways to help your loved one practice at home while protecting your own energy.
3. How to Help Someone Who Had a Stroke: Tips for Caregivers: Find seven practical ways to support recovery, from independence to emotional care.
4. Cost of Spinal Cord Injury: What to Expect and How to Save on Rehabilitation Costs: See what long-term care really costs and six ways to lower your expenses.
5. Home Health vs. Outpatient Therapy After Stroke or Brain Injury: What Is The Better Option?: Compare both settings so you can plan care that fits your family and budget.