Let’s be honest: it’s really difficult and stressful acting as a caregiver for elderly parents. There is absolutely no shame in admitting this. It takes a lot of time out of your life, it can make work difficult and it can sometimes make it very hard to fulfill your own responsibilities.

The government recognizes this, and that’s why there are federal cash and income tax benefits available for those who have to care for elderly loved ones. Learn about caregiver benefits, help to which you are entitled under the law when you have to spend time caring for elderly parents and relatives.

Caregiver Benefits

Caregiver benefits are offered in most states and permit a waiver through Medicaid that allows the federal government to pay the caregiver for their services. These programs have fairly stringent requirements to enter (often, eligibility for Medicaid is requisite, for example), but they can help with independent living, address home assistance shortages, and can help with the difficulties you face as a caregiver.

Types of Benefits

There are a number of different types of benefits for which you may be eligible in these situations. These include:

  •   Private pay, where the senior for whom you care pays you for the hours you spend helping them
  •  Tax exemptions, wherein you may be able to claim your parent as a dependent on your tax return
  •  Tax deductions for medical expenses

Private Pay

In some cases, your parents may be able to pay you for the hours you spend helping them out. Doing this requires you to develop a legal agreement with your parent which shows they are paying you for your services, and not giving you gifts that could disqualify them for future enrollment in Medicaid.

However, private pay requires that you pay income tax, and requires your parent to report the payments on their tax forms, and you need to accept a rate per hour that’s in line with the average national rate that healthcare aide workers receive.

One thing to beware: accepting cash under the table from your parents can be risky; if your parent is showing significant regular withdrawals, they could be audited and it could cost them Medicaid eligibility in the future, as well as subjecting you to tax penalties.

Tax Exemptions and Deductions

If you pay more than 50 percent of your parent’s living expenses—clothes, food, housing, necessities, etc.—you may be able to claim them as a dependent on your tax return. If you are unmarried, you may also be able to file, in this case, as head of household, which can be significant savings.

In addition, if you have spent out of pocket to drive your senior relative to appointments, modify their home for disability access and the like, and if the cost exceeds a certain percentage of your gross income, these expenses may be deductible.

Help and Advice

It can be tricky understanding the details, ins and outs of when and how you can apply these caregiver benefits, and that’s where an elder law attorney comes into play. In conjunction with a solid financial advisor, an elder law attorney can help educate you on when you can collect benefits like this, and protect your senior loved one’s rights. If you’re in this situation and need more information, call Stano Law today.