Claiming your parent as a dependent

Description

Abstract: A 2016 AARP study found that caregivers spend an average of $7,000 in out-of-pocket costs related to caregiving. To reduce their tax bills and offset some of the costs incurred, some caregivers can claim an exemption for parents or relatives for whom they’re providing care as dependents. This article looks at some of the ins and outs of how to qualify for an exemption and notes that there are many technical nuances involved in determining how much caregivers can claim. A sidebar explains another tax benefit available for someone caring for a parent or other individual — the dependent care credit.