Is the cost of a live-in, "non-medical" (i.e. not a nurse) caregiver for a disabled person tax deductible?

Question

The doctor certified that the disabled person must have a live-in caregiver; otherwise a nursing home would be the only alternative. The person is 88 years old and wheelchair bound due to pain and weakness from arthritis & spinal stenosis.

Answer 1

You can include in medical expenses wages and other amounts you pay for nursing services. The services need not be performed by a nurse as long as the services are of a kind generally performed by a nurse. This includes services connected with caring for the patient's condition, such as giving medication or changing dressings, as well as bathing and grooming the patient. These services can be provided in your home or another care facility.

Only the amount spent for nursing services is a medical expense. If the attendant also provides personal and household services, amounts paid to the attendant must be divided between the time spent performing household and personal services and the time spent for nursing services.

Answer 2

If the live-in care is for the purposes of allowing the taxpayer (and spouse if there is one) to work, and the person receiving the care is a dependent of that taxpayer, then these expenses could be eligible up to the limit of $3000 per year for a dependent care credit.

Other than that, no, the care would not be deductible.

In most cases, this person would be an employee, so the payer would have to deduct taxes, and pay the employer share of social security and medicare, and any other employer taxes.

Answer 3

All cases are handled on an individual basis. I suggest that you consult a tax accountant for guidance.

Believe it or not, the Taxation Dept is really very helpful at answering questions regarding all tax questions honestly and concisely. You just have to know which questions to ask. (There is a policy in place where they will not point out ALL the credits you may be entitled to claim, but they will answer quesions honestly. So knowing which questions to ask is paramount.)