National Caregivers Day is observed to recognize and honor the dedication and hard work of the approximately 53 million caregivers who provide essential support to individuals in need of care due to aging, illness or disability. These caregivers may include professional caregivers, family members or friends who offer physical, emotional and practical care. In the United States, National Caregivers Day is observed on the third Friday of February each year – February 21st in 2025. The day raises awareness of the vital role caregivers play in improving the lives of those they care for. It acknowledges their selflessness and often underappreciated contributions, encouraging people to show gratitude and support.
Ways to Celebrate
- Thank a caregiver: Sit down and talk with them, send a note or send a gift to express gratitude for their efforts.
- Offer help: Provide a break by offering to help with caregiving tasks such as cooking.
- Support self-care: Treat them to a massage or cover for them while they see their own doctor.
- Raise awareness: Share posts or stories about caregiving to spread appreciation.
- Donate: Support organizations that provide resources and support for caregivers.
Caregivers & Taxes
In addition to the person-to-person support discussed above, there is some financial support available through our tax system. As a reminder, the tax laws offer two basic ways to lower the amount you owe in taxes. There are credits and deductions.
Tax Credits
A tax credit directly reduces the amount of tax you owe, dollar for dollar. So, for example, if you owe $2,000 in taxes and qualify for a $500 tax credit, your tax bill decreases to $1,500. There are two varieties of tax credits: refundable and nonrefundable. With refundable tax credits, if the credit exceeds your tax liability, you get the remaining amount as a refund. On the other hand, nonrefundable tax credits can only reduce your tax bill to zero but won’t result in a refund.
Tax Deductions
Tax deductions reduce your taxable income, which lowers the amount of income that is subject to tax. As an example, if you earn $50,000 and claim a $1,000 deduction, your taxable income becomes $49,000. The actual tax savings depends on your marginal tax rate (e.g., 22%, 24%). As with credits, there are two kinds of deductions: standard and itemized. A standard deduction is what you take if you don’t itemize your deductions. For 2025, the standard deduction is $30,000 for joint filers. Itemized deductions include specific expenses you can claim instead of the standard deduction (e.g., medical expenses, mortgage interest and charitable donations).
Okay, back to the topic at hand, caregiver credits and deductions. This can become a little complicated as caregiving can include children, parents and others. For this article, let’s focus on tax effects of providing care for our aging parent or parents.
Dependents
Being a dependent is essential to receiving caregiver tax breaks. The IRS says that to claim your parent as a dependent you must meet the following tests:
- You (and your spouse if filing jointly) are not a dependent of another taxpayer.
- Your parent, if married, doesn’t file a joint return or files a joint return only to claim a refund of income tax withheld or estimated tax paid.
- Your parent is a U.S. citizen, U.S. national, U.S. resident alien or a resident of Canada or Mexico.
- You paid more than half of your parent’s support for the calendar year.
- Your parent’s gross income for the calendar year was less than $5,050.
- Your parent isn’t a qualifying child of another taxpayer.
- If your parent is your foster parent, they must have lived with you all year in your main home and as a member of your household.
If your parent is a qualified dependent, here are some tax breaks that may apply.
Child and Dependent Care Credit
If you pay for care services to enable you to work or seek employment, you may qualify for the Child and Dependent Care Credit. This credit allows you to claim a percentage of up to $3,000 in caregiving expenses for one qualifying individual or $6,000 for two or more. To be eligible:
- Dependent Status: Your parent must be physically or mentally incapable of self-care and meet certain dependency criteria.
- Work-Related: The care must be necessary for you (and your spouse, if filing jointly) to work or actively look for work.
Credit for Other Dependents
If your parent qualifies as your dependent, you may be eligible for a nonrefundable tax credit of up to $500 under the Credit for Other Dependents.
Medical Expense Deduction
If you itemize deductions, you can deduct unreimbursed medical expenses that exceed 7.5% of your adjusted gross income. This includes medical expenses you pay for your parent, provided they qualify as your dependent. Eligible expenses encompass a wide range of medical costs, such as: Doctor visits, prescription medications, medical equipment and home modifications for medical reasons.
Flexible Spending Accounts (FSAs) and Health Savings Accounts (HSAs)
Contributions to FSAs and HSAs are made with pre-tax dollars and can be used to pay for qualified medical expenses for you and your dependents. Utilizing these accounts can lower your taxable income while covering out-of-pocket healthcare costs.
Caregiving has numerous aspects. For example, we didn’t even get into caregiving for children in this article. If you’d like to further talk about caregiving, taxes, or any other financial matters, we can discuss things in a no-charge, no-obligation initial meeting. Please visit our website or give us a call at 970.419.8212 to set up an in-person or virtual meeting.
This article is for informational purposes only. This website does not provide tax or investment advice, nor is it an offer or solicitation of any kind to buy or sell any investment products. Please consult your tax or investment advisor for specific advice.