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Don’t Miss Out on Tax Credits for Caregivers & the Elderly–Next Year!

accounting series- confusing tax formsToday being Tax Day, it’s probably too late for you to claim additional tax credits for certain expenses related to being a family caregiver during 2014, but it’s the perfect time to start collecting records that will prove the caregiving expenses you’ve incurred in 2015!

When Beverly drew my attention to three ND House Bills related to caregiving and the elderly, a big question mark lit up in my brain: “Was I aware of ALL the expenses I could have claimed, on both my aging father’s taxes, which I do for him, and possibly on my own tax return? Even though he doesn’t live with me, I drive him to a lot of Dr. appointments, and I oversee his care at an assisted living center that doesn’t give him quite as much assistance as he requires. I hadn’t given a thought to my out-of-pocket expenses related to being a family caregiver!

I went straight to Google, where I found two excellent articles that I plan to study in more depth, and that I hope you will take a look at, too. 

The first article is on APlaceForMom.com, and is called Tax Tips for Seniors: How to Claim Caregiver Tax Deductions. The article begins, “Whether you are a senior citizen or a caregiver for one, tax season means accounting for the past year’s medical expenses. Both individuals and people who care for qualifying relatives can claim tax deductions and credits for out-of-pocket medical expenses. These costs can include a range of expenditures such as:

  • Dental treatments
  • Cost of transportation needed to get to a medical appointment
  • Health insurance premiums
  • Long-term care services”

The Internal Revenue Service (IRS) states, “Medical expenses are the costs of diagnosis, cure, mitigation, treatment, or prevention of diseases, and the costs for treatments affecting any part or function of the body.” For a full list of allowable medical expenses, see Publication 502 at the IRS web site (www.irs.gov). Continue reading the article for more information “in plain English” regarding the rules that govern senior-related tax deductions, and for more tax tips for seniors and their caregivers.

The second article is on AARP.org and is titled 6 Tax Tips for Family Caregivers. The goal of the piece is to help learn what to do to save money and qualify for some federal tax breaks. It was updated this year. Click on the link above to find out:

  1. How does a relative qualify to become a dependent on your tax return?
  2. When can a caregiver claim a tax benefit for a dependent’s medical costs?
  3. Are caregiver tax deductions limited to just relatives?
  4. What other kinds of dependent expenses are deductible?
  5. What happens when more than one sibling wants to take the parent as a dependent on their tax form?
  6. Can caregivers use their flexible spending accounts to pay for a relative’s eligible medical expenses?

Use your influence to help pass new legislation

If you live in North Dakota or another state that collects State Income Tax, you should be aware of the current laws regarding caregivers and also those that might be under consideration by your State Legislature. Your input combined with the input of others could be influential in helping favorable legislation to pass. This ND House Bill bears watching:

HB 1215 – Relating to Tax Credit for Expenses of Caring for Family Members

The original intent of this Bill was to expand income tax credit for expenses of caring for certain family members and to adjust income levels to increase eligibility for caregivers to receive an income tax credit. The original language of the bill, which included “companionship services,” was cut and then cut again and again until what was finally signed into law on April 6, 2015 was only a provision for a study of the issues.

SECTION 1. LEGISLATIVE MANAGEMENT STUDY – TAX CREDIT FOR CARE OF FAMILY MEMBER. During the 2015-16 interim, the legislative management shall consider studying individual income tax credits available for qualified care expenses paid for the care of a qualifying family member. The study, if conducted, must determine whether the credit provides adequate incentives for individuals to provide care for those who cannot care for their own needs and the degree that care provided by individuals reduces the cost of state and local funding for care services. The legislative management shall report its findings and recommendations, together with any legislation required to implement the recommendations, to the sixty-fifth legislative assembly.

If you are a caregiver or an elderly person in need of care, you can follow the progress of ND HB 1215 (and others) online, and you can even sign up to be alerted to progress or changes. In addition to researching and taking advantage of the tax credits that are currently in the Tax Code, you can let your voice be heard and influence the benefits that may be available to you and your loved ones in the future.

By Marti Lythgoe, DTN HC Writer & Editor

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