Tax Breaks for Dementia Caregivers: Deductions and Credits to Ask About

A plain-language guide to the federal tax breaks families caring for someone with dementia may qualify for, including the medical expense deduction, memory care and in-home care costs, the dependent care credit, the credit for other dependents and the new senior deduction.

By Jim Pavlish, Editor · Last updated: November 5, 2026 · Editorial policy

Short answer: yes, some dementia care costs can lower your federal taxes. Under IRS rules, care for someone with severe cognitive impairment who needs substantial supervision can count as a medical expense, which can include in-home care and the medical part of memory care or nursing home costs. You can deduct only the part of total medical costs above 7.5% of your adjusted gross income, and only if you itemize. If you pay for care so you can work, the dependent care credit may help instead. If your parent qualifies as your dependent, you may also get a $500 credit for other dependents.

This page is general information, not tax or legal advice. Rules change and every family is different. Figures are from IRS publications for 2025 returns; check current IRS pages and talk to a tax professional before you file.

1. The medical expense deduction

The IRS lets you deduct medical expenses you paid for yourself, your spouse or your dependent, but only the part that is more than 7.5% of your adjusted gross income (AGI), and only if you itemize deductions on Schedule A instead of taking the standard deduction (IRS Publication 502).

Dementia care costs add up fast, so families paying for care may clear that bar.

Why dementia care can count

Publication 502 says qualified long-term care services count as medical expenses. These are care services that a "chronically ill" person needs under a plan of care prescribed by a licensed health care practitioner.

Someone counts as chronically ill if, within the past 12 months, a licensed health care practitioner has certified either that:

• they can't do at least two activities of daily living (eating, toileting, transferring, bathing, dressing, continence) without substantial help for at least 90 days, or
• they need substantial supervision to be protected from threats to health and safety due to severe cognitive impairment.

The second test fits many people with dementia. Ask the doctor about a written certification and plan of care, and keep a copy.

Costs that may count

According to Publication 502, these can be included, within the rules:

• In-home care. Nursing-type care counts even if the helper isn't a nurse, such as help with bathing, grooming and medicines. Plain housekeeping usually doesn't, unless it's part of qualified long-term care; if one person does both, you split the cost.
• Nursing homes and memory care. If a principal reason for being there is medical care, the whole cost, including meals and lodging, can count. If the reason is personal, only the medical or nursing part counts. Ask the facility for a statement breaking out the care costs.
• Home changes for safety and access, like grab bars, railings, ramps, modified doors and stair changes, can count to the extent they don't raise the home's value.
• Driving to medical care. For 2025, the standard rate is 21 cents a mile, plus parking and tolls.
• Medicare Part B and Part D premiums, and long-term care insurance premiums up to age-based limits. You can't count anything insurance, Medicare or Medicaid paid.

Generally not included: over-the-counter medicines (except insulin), supplements not prescribed for a diagnosed condition, funeral costs, and anything insurance or another source paid.

Paying for a parent's care

You can include costs you paid for a parent who was your dependent when the care was given or when you paid, and in some cases even if their income was too high to claim them (Publication 502). When siblings share a parent's support, a multiple support agreement can let one of them count the parent as a dependent; Publication 502 walks through an example.

2. The dependent care credit (if you work)

If you pay for care so that you (and your spouse, if married) can work or look for work, you may qualify for the Child and Dependent Care Credit, which also covers adults (IRS Publication 503).

The person cared for must be your spouse or dependent who wasn't physically or mentally able to care for themselves and lived with you for more than half the year. Care outside your home, such as an adult day program, can count if the person regularly spends at least 8 hours a day in your home.

For 2025 returns, the credit is a percentage of up to $3,000 of care costs for one person ($6,000 for two or more). A 2025 law changes the credit from 2026 on, so check the current Publication 503.

You can't use the same dollars for both this credit and the medical deduction.

3. Claiming a parent as a dependent

If your parent is your "qualifying relative," you may be able to claim them as a dependent. Under IRS rules (Publication 501), that generally means:

• you provide more than half of their total support for the year,
• their gross income is under $5,200 (for 2025), and
• they aren't anyone's qualifying child.

A parent doesn't have to live with you to qualify. Ask your preparer which kinds of income count toward the gross income limit.

A dependent parent may get you a $500 credit for other dependents (it phases out above $200,000 of income, $400,000 for joint filers).

4. The new deduction for people 65 and older

For tax years 2025 through 2028, people who are 65 or older may take an extra $6,000 deduction ($12,000 for a married couple if both qualify), on top of the existing extra standard deduction for seniors. It phases out above $75,000 of modified AGI ($150,000 for joint filers), and you don't have to itemize to get it (IRS fact sheet FS-2025-03).

This may help an older caregiver, or the person with dementia on their own return.

Where to get free tax help

The IRS's Tax Counseling for the Elderly (TCE) program offers free help, especially for people 60 and older, and VITA helps people with low to moderate incomes and people with disabilities: call 800-906-9887 or visit IRS.gov/VITA. For bigger decisions, see an elder law attorney or CPA (Legal Planning, Financial Planning and Paying for Care).

Common questions

Can I deduct memory care costs for my parent?

Possibly. If your parent is your dependent and a principal reason for being there is medical care, Publication 502 says the full cost, including meals and lodging, can count; otherwise only the medical part counts. Only the total above 7.5% of AGI is deductible, and only if you itemize.

Is in-home care for dementia tax deductible?

It can be. Nursing-type care such as help with bathing and medicines counts under IRS rules, as do qualified long-term care services for someone certified as needing substantial supervision because of severe cognitive impairment. Plain housekeeping usually doesn't.

Can I claim my mother with dementia as a dependent if she doesn't live with me?

Yes, a parent doesn't have to live with you. You generally need to provide more than half of her support, and her gross income must be under the IRS limit ($5,200 for 2025). The dependent care credit is different: it requires that she lived with you for more than half the year.

The bottom line

Dementia care costs can mean real tax savings, but only with good records. Keep every care bill, pharmacy printout and medical-mileage log, ask the doctor about a written plan of care, ask any facility for a statement of the medical part of the bill, and get tax help before you file.

Sources

1. Internal Revenue Service: Publication 502 (2025), Medical and Dental Expenses
2. Internal Revenue Service: Publication 503 (2025), Child and Dependent Care Expenses
3. Internal Revenue Service: Child Tax Credit and Credit for Other Dependents
4. Internal Revenue Service: Working Families Tax Cuts, tax deductions for working Americans and seniors (FS-2025-03)
5. Internal Revenue Service: Publication 501 (2025), Dependents, Standard Deduction, and Filing Information

Not medical advice. This article is general information, not a diagnosis or treatment plan for any individual. Talk with a doctor about your situation.

Related articles

• Financial Planning and Paying for Care
• Medicaid Spend-Down for Nursing Homes and Memory Care
• Medicare, Medicaid and Dementia Care
• Getting Paid as a Family Caregiver
• In-Home Care for Dementia: Types, Costs and How to Hire Help
• Choosing Memory Care or a Nursing Home