Is in-home care tax deductible?

The IRS treats qualified long-term care services as medical expenses. To qualify, the person receiving care must be certified as chronically ill within the past 12 months — meaning either unable to perform at least 2 of 6 activities of daily living for at least 90 days, or requiring substantial supervision due to severe cognitive impairment. Services must be provided under a written plan of care prescribed by a licensed health care practitioner (RN, doctor, or licensed social worker).

When those conditions are met, hands-on care hours count. Personal care and homemaker services incidental to that care can also qualify. General companion or homemaker hours by themselves — no ADL trigger, no plan of care — do not qualify.

The deduction flows through Schedule A as a medical expense. Only the total medical expenses exceeding 7.5 percent of adjusted gross income are deductible, and the taxpayer must itemize. Many families miss this because home care agency invoices are not automatically labeled as medical.

This is general information, not tax advice. Rules for the Dependent Care Credit, the Medical Expense deduction, and long-term care insurance premiums each work differently. Bring your agency invoices and a signed plan of care to a CPA who handles elder-care returns.

For the full breakdown, see the cornerstone: Paying for Home Care guide.