Deduction for Long-Term Care Expenses

Deduction for long-term care expenses

paid on behalf of a dependent

A taxpayer can deduct some or all of the expenses paid in connection with a parent or other relative’s long-term care.

Treatment as Medical Expense

Since long-term care expenses are generally treated as a form of medical expense, they will be deductible only to the extent that in any year the taxpayer’s total medical expenses (including eligible long-term care expenses) for all qualified persons exceed 7.5% of adjusted gross income, and only if the taxpayer can itemize his or her deductions.

In addition, the deduction is limited to only those expenses that are not reimbursed by insurance or otherwise.

DEPENDENT OF THE TAXPAYER

For the long-term care expenses incurred on behalf of a parent or other relative to be eligible for the medical expense deduction, the individual must qualify as the taxpayer’s "dependent," which is discussed in the preceding sub-topic.

However, the medical expense deduction will be available even if the taxpayer cannot claim a dependency exemption for the individual (for example, if the individual has more than $3,700, for 2011, of gross income).

MULTIPLE SUPPORT AGREEMENT

A multiple support agreement must be used if two or more persons together provide more than one-half of a qualified relative's support, but no one person alone provides more than one-half of such support. To be eligible to enter into such an agreement, a taxpayer must have contributed more than ten percent of the qualified relative's total support in a given year.

In such case, two or more eligible taxpayers who jointly support a qualified relative can agree which one of them will be entitled to claim the relative as a dependent for such year and take the deduction for the medical expenses that he or she has individually paid for that year. The others must furnish the taxpayer with a signed statement by which they waive their right to claim the relative as a dependent on their own tax returns. By this method, they can take turns each year in claiming the relative as a dependent.

NEXT: Examples of Deductible Expenses

DISCLAIMER

Martin J. Hagan is licensed to practice law in the Commonwealth of Pennsylvania. This website is intended solely for informational use and is not intended to solicit clients. Likewise, any information contained in or obtained from this web site is for informational purposes only and is not intended to be used as legal advice.

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Last Updated: 02/07/12