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Frequently Asked Tax Questions

IRS Procedures - For Caregivers

  1. I am a caregiver for my aging parent who lives in my home. May I claim my parent as a dependent on my tax return?
  2. I am a caregiver for my aging parent who lives in my home. May I file as head of household?
  3. I care for my parents in my home. My parents occasionally give me money to pay for their share of household expenses. Is this money taxable to me?
  4. I pay for some of my parent’s medical expenses. May I deduct these expenses on my return?
  5. My father is suffering from dementia. As a result, I must cash his monthly Social Security check and use the proceeds for his care. What are the resulting tax consequences?
  6. I received a death benefit from my parent’s life insurance policy. Are these insurance proceeds taxable to me?

Rev. date: 03/13/2015

I am a caregiver for my aging parent who lives in my home. May I claim my parent as a dependent on my tax return?

You may claim your parent as a dependent if you meet the following tests:
  1. You are not a dependent of another taxpayer.
  2. Your parent does not file a joint return.
  3. Your parent is a U.S. citizen, U.S. national, U.S. resident alien, or a resident of Canada or Mexico.
  4. You paid more than half of your parent's support for the calendar year.
  5. Your parent's gross income for the calendar year was less than the exemption amount.
See Table 3-1 in Chapter 3 of Publication 17, Your Federal Income Tax for Individuals, "Overview of the Rules for Claiming an Exemption for a Dependent," for additional information about claiming a dependent.

Rev. date: 03/13/2015

I am a caregiver for my aging parent who lives in my home. May I file as head of household?

You may file as head of household only if you meet the following requirements:
  1. You are unmarried or considered unmarried on the last day of the year.
  2. You may claim a dependency exemption for your parent.
  3. You paid more than half the cost of keeping up a home for your parent for the tax year. Your dependent parent does not have to live with you. See Special rule for parent in Chapter 2 of Publication 17, Your Federal Income Tax for Individuals under "Qualifying Person." 
For more information, refer to:

Rev. date: 12/17/2014

I care for my parents in my home. My parents occasionally give me money to pay for their share of household expenses. Is this money taxable to me?

An amount of money that your parents give you to offset their expenses is not taxable to you. This amount is treated as support provided by your parents in determining whether your parents are your dependents.
See Publication 501, Exemptions, Standard Deduction, and Filing Information.

Rev. date: 03/13/2015

I pay for some of my parent’s medical expenses. May I deduct these expenses on my return?

If you can claim your parent as a dependent, you also may be able to claim a deduction for the portion of your parent’s medical or dental expenses that you paid. For tax years beginning after December 31, 2012, your total deduction for medical and dental expenses must be reduced by 10 percent of your adjusted gross income. There is a temporary exemption from January 1, 2013, to December 31, 2016, for individuals age 65 and older and their spouses who can reduce their medical and dental expenses by 7.5 percent. See Medical and Dental Expenses in Chapter 21 of Publication 17, Your Federal Income Tax for Individuals, for additional information.

Rev. date: 12/17/2014

My father is suffering from dementia. As a result, I must cash his monthly Social Security check and use the proceeds for his care. What are the resulting tax consequences?

Your father’s Social Security benefits are not taxable to you; however, in determining whether your father is your dependent, you should consider the benefits used for your father’s support as support provided by your parent.   
See Publication 501, Exemptions, Standard Deduction, and Filing Information, for additional information.

Rev. date: 12/17/2014

I received a death benefit from my parent’s life insurance policy. Are these insurance proceeds taxable to me?

Life insurance proceeds paid to you because of the death of the insured person are not taxable unless the policy was turned over to you for a price. This is true even if the proceeds were paid under an accident or health insurance policy or an endowment contract. However, interest income received as a result of life insurance proceeds may be taxable.
See Publication 525, Taxable and Nontaxable Income, for additional information.