This year, when you file your taxes, you may find that the government is willing to help offset some of the costs of financially caring for your parents. There a multiple ways that you can get tax assistance for parental support when you file your 2014 return. A new dependency tax care credit, along with the ability to claim a parent as a dependent could supplement tax breaks that also allow you to write off parental medical expenses. You may be entitled to one or more of these if you meet the government requirements for parental dependency.
What Qualifies A Parent as A Dependent?
According to the Internal Revenue Service’s basic dependency rule, you need to have been responsible for over half of your parent’s yearly income in order to claim mom or dad on your tax form. For each dependent that you claim, you reduce your taxable income by $3,950.
It’s not necessary that your parents live in your household, but there are a few requirements to meet in order to gain exemption. Excluding non-taxable Social Security benefits, your parent’s income must be less than $3,950. The gross income should take into account all pensions, interest, rental income, wages, and dividends. You can’t be claimed as a dependent on a separate tax form, nor can your parents file a joint return, unless the joint return is only a refund claim and no tax is owed.
Claiming the Exemption
If you meet all of the above requirements, you can claim your parent as a dependent on this year’s taxes. Doing so is simple, and only requires that you write your parent’s name, social security number, and relationship in the space provided for exemptions on the 1040 form. It’s important that you have financial proof of your support, such as receipts.
Adult Day Care Credit
If your parent qualifies as a dependent, and they lived in your home in 2014 and required day care services, you may be eligible for the Adult Day Care Tax Credit. This tax credit allows you to write off 20% to 35% of the cost of services up to $3,000, dependent on your own income.
While the tax rules don’t specifically mention which types of day care programs qualify for the tax credit, you cannot claim expenses if you paid your spouse for providing care, or if you quantify your own time with a specific monetary amount.
Claiming Your Parent’s Medical Expenses
Once you’ve determined you can claim your parent as a dependent, you may be able to deduct certain medical expenses, like prescriptions and hospital bills that you contributed to for your parents. However, all medical expense deductions, whether your personal ones, your parents, or some combination of the two, have to exceed at least 10% of your adjusted gross income for the previous year.
