3 Essential Tax Credits for Caring for a Parent (2025 Guide)

Finding the right **tax credits for caring for a parent** can feel overwhelming, but it’s one of the most important financial steps you can take. Millions of Americans are part of the “sandwich generation,” supporting both their children and their aging parents.

It’s a role of love and responsibility, but it also comes with significant financial strain. Fortunately, the IRS has specific tax benefits designed to provide relief.

Many of these benefits are overlooked because the rules can be complex. This guide will break down the three most valuable tax benefits in simple terms to help you claim the money you deserve.

1. The Credit for Other Dependents (COD)

This is often the first and most important benefit to consider. If your parent qualifies as your dependent, you can claim a non-refundable tax credit of up to **$500**. This directly reduces your tax bill, dollar for dollar.

The key is determining if your parent meets the IRS definition of a “qualifying relative.” To claim your parent as a dependent, they must meet four key tests, which you can explore in detail on the official IRS website.

The Four Tests for a Qualifying Relative:

• Gross Income Test: Your parent’s taxable gross income for the year must be less than a specific amount (for 2025, it’s $5,050, but this figure is adjusted annually for inflation). Note that non-taxable income like Social Security benefits generally doesn’t count.
• Support Test: This is often the most crucial test. You must provide more than half of their total support for the year. “Support” includes all money spent on their well-being, such as food, lodging, medical care, and other necessities.
• Relationship Test: Your parent automatically meets this requirement.
• Not a Qualifying Child Test: They cannot be your qualifying child or the qualifying child of any other taxpayer.

Example: Your mother lives with you. Her only income is $15,000 from Social Security (non-taxable). You pay for her food, utilities, and medical co-pays. Because her taxable income is $0 and you provide more than half her support, she likely qualifies as your dependent, making you eligible for the $500 credit.

2. The Child and Dependent Care Credit

This credit isn’t just for children! Many people overlook that it can also be claimed for a spouse or other dependent who is physically or mentally incapable of self-care.

If you pay for adult day care or a home health aide for your parent so that you (and your spouse, if filing jointly) can work or look for work, you may be able to claim this credit.

The credit is a percentage of your work-related care expenses. According to the IRS, a person is considered “incapable of self-care” if they cannot handle basic needs—such as dressing, cleaning, or feeding themselves—due to physical or mental problems.

Key Requirements for This Credit:

• Your parent must live with you for more than half the year.
• They must be physically or mentally unable to care for themselves.
• The care expenses must be necessary for you to be able to work. For example, paying for an aide to supervise your parent while you are at your job would qualify.

This is one of the most valuable but often overlooked tax credits available to caregivers.

3. Medical Expense Deductions

This is a deduction, not a credit, but it can be extremely valuable. Here’s the most overlooked part: if you provide more than half of your parent’s support, you can include the medical expenses you pay for them with your own when you itemize deductions.

This is true **even if your parent doesn’t qualify as your dependent** because their income is too high.

You can deduct the total amount of qualifying medical expenses that exceeds 7.5% of your Adjusted Gross Income (AGI). Qualifying expenses are broad and can include:

• Prescription medications and insulin
• Payments to doctors, dentists, and other medical practitioners
• Premiums for health insurance and qualified long-term care insurance
• In-home nursing care or costs for a nursing home
• Special equipment like wheelchairs or hearing aids
• Transportation costs to and from medical appointments

Example: Your AGI is $100,000. Your threshold for deductions is $7,500 (7.5% of your AGI). If you paid $12,000 in medical expenses for yourself and your parent, you could deduct the amount that exceeds the threshold, which would be $4,500 ($12,000 – $7,500).

Keeping detailed records of these expenses is crucial. To see if you qualify for a federal tax rebate based on your overall situation, check our guide.