4 Tax Benefits If You’re Taking Care of Children and Elders

Being an in-home caregiver can be a difficult job, emotionally and financially. Being responsible for someone else’s well-being can be stressful, and it is often expensive.

Fortunately, the IRS has some tax benefits available if you take care of and support a family member. While it won’t help with the emotional side of caring for a loved one, the associated tax benefits may help you with the financial costs of doing so.

Child Tax Credit

If you have a dependent child, keep in mind that the Child Tax Credit was increased to $2,000 per dependent child under 17. More families can get the credit since the income limit is now $200,000  for single filers and $400,000 for those married filing jointly. 

Besides the tax benefit you can receive from dependent children under 17, you can also possibly get a tax benefit from your other dependents. This is beneficial because, in an increasing number of cases, elderly parents and other family members can also be classified as qualifying dependents. The Credit for Other Dependents is a credit of up to $500 if you are supporting someone other than your child under 17.

The IRS permits you to claim the Credit for Other Dependents if they meet these criteria:

• They must be a U.S. citizen, a U.S. national, or a U.S. resident alien with a valid identification number, which includes a Social Security number, Individual Taxpayer Identification Number, or Adoption Taxpayer Identification Number.
• They have a gross income that is not greater than $ 5,050 for the 2024 tax year.
• You provided more than half of their financial support. . This includes expenses such as clothing, medical care, housing, food, and transportation. If they are a relative, they do not have to live with you, but non-relatives have to live with you for the entire year.
• They are not filing a joint return with their spouse. 
• Finally, they cannot be claimed as a dependent on another tax return.

Child and Dependent Care Credit

The Child and Dependent Care Credit is a credit used to pay for expenses for the care of a child or dependent that enables you to either work or look for work. This is most often used by parents to pay for childcare, but it applies to other dependents as well.

The credit is up to $1,050 (35% of $3,000) for one child under 13 (no age limit if disabled) and up to $2,100 (35% of $6,000) for two or more children under 13 (no age limit if disabled). 

• If the dependent is your spouse, they must be physically or mentally incapable of self-care and lived with you for more than half of the year.
• If the dependent is not your spouse, they must be an individual who was physically or mentally incapable of self-care, lived with you for more than half of the year, and either:
  • (a) was your dependent; or 
  • (b) could have been your dependent except that he or she received gross income of $5,050 or more in 2024 or filed a joint return, or you (or your spouse, if filing jointly) could have been claimed as a dependent on another taxpayer’s 2024 return.

Head of Household Status

If your filing status is normally single, you will be able to file as a head of household if you have a dependent. This gives you additional tax savings because the standard deduction for head of household is more than the standard deduction if you file as single.

For example, the standard deduction in 2024 for single filing status is $14,600, but it jumps to $21,900 for heads of household.

Unreimbursed Medical Expenses

Finally, if you have any unreimbursed medical expenses for a dependent, you may be able to deduct them from your taxes. These are the same rules for deducting your own unreimbursed medical expenses. If you have qualified medical expenses that exceed 7.5% of your adjusted gross income and you itemize your deductions, you may be able to deduct them. 

No matter what moves you made last year, TurboTax will make them count on your taxes. Whether you want to do your taxes yourself or have a TurboTax expert file for you, we’ll make sure you get every dollar you deserve and your biggest possible refund – guaranteed.