Autumn 2026·7 min read·Abloom Senior Living

Is in-home care tax deductible?

What the IRS and the State of Minnesota let families count, and the paperwork that makes it possible.

How the IRS treats what you pay for care at home

Families usually arrive at this question because Medicare does not pay for ongoing personal care at home, which leaves the bill with the family. Some of that bill is a medical expense in the eyes of the IRS.

This article is general information from a care provider. It is not legal, financial, or medical advice. What happens on your return depends on your income, your filing status, and your parent's situation, so ask a tax professional about your own.

IRS Publication 502 says you can include in medical expenses "wages and other amounts you pay for nursing services," and then adds: "The services need not be performed by a nurse as long as the services are of a kind generally performed by a nurse." The publication lists bathing and grooming alongside giving medication and changing dressings. So the aide who helps your father shower and walks him through his pills is doing work the IRS counts as medical, no matter what her job title is.

Publication 502 also covers the rest of the visit. When a caregiver does housework too, it says the amounts paid "must be divided between the time spent performing household and personal services and the time spent for nursing services." Its own example uses a caregiver paid $300 a week who spends about a tenth of her time on dishes and laundry, so $270 of that week counts as a medical expense and the remaining $30 counts as household help.

A threshold applies to all of it. Publication 502 states that on a federal return you can deduct "only the amount of your medical and dental expenses that is more than 7.5% of your AGI." For a household with $80,000 of adjusted gross income, the first $6,000 of medical spending does nothing on Schedule A. Families paying for regular hours of personal care often clear that line without realizing it, particularly in a year that included a hospital stay. You do have to itemize federally to use any of it. If you have always taken the standard deduction, ask your preparer about it. Minnesota has its own rule.

Which services count, and what has to be on paper

A second category in Publication 502 matters for families arranging a lot of hours. The publication defines qualified long-term care services as "necessary diagnostic, preventive, therapeutic, curing, treating, mitigating, rehabilitative services, and maintenance and personal care services" that a chronically ill individual requires and that are "provided pursuant to a plan of care prescribed by a licensed health care practitioner." The IRS wants a practitioner to have written down that your parent needs this care, and what the care consists of.

The definition carries two conditions. Publication 502 treats a person as chronically ill if a licensed health care practitioner has certified within the previous 12 months either that the person cannot perform at least two of six activities of daily living without substantial assistance for at least 90 days, or that the person requires substantial supervision because of severe cognitive impairment. The publication lists the six as eating, toileting, transferring, bathing, dressing, and continence. There also has to be a written plan of care prescribed by a practitioner.

How much of the bill comes back depends on those two documents. Most families who run into trouble here are missing the certification or the plan of care, and both are ordinary paperwork. If your parent is already getting nursing visits or seeing a clinic regularly, ask for them while care is being set up. By April the person who would sign them is harder to reach.

Minnesota uses its own threshold

Minnesota runs a separate itemized deduction with a different number in it. The Minnesota Department of Revenue's Schedule M1SA tells filers to subtract 10 percent of federal adjusted gross income from their medical and dental expenses, where the federal floor is 7.5 percent. The same schedule says you may file it "even if you did not file federal Schedule A."

You can take the federal standard deduction and still itemize on your Minnesota return. A preparer can run it both ways and use whichever comes out ahead, so ask for it by name, since it is easy to skip when the federal return is not itemized. What you can do from your end is make sure the care invoices are in the pile they work from. Put them in one folder as they come in. Our page on paying for care covers the funding routes that sit behind these numbers.

When you are paying for a parent's care

If you are paying for a parent who lives in her own house in Cottage Grove or Stillwater, the dependency rules may still let you claim the expense. Medical expenses you pay for your spouse or your dependent can go on your return. Publication 502 adds a rule for parents: you can include medical expenses you paid for someone who would have been your dependent except that the person had too much gross income, or filed a joint return. Social Security plus a pension can be enough to fail the dependency income test while the medical expenses still land on your return, as long as you supplied more than half of your parent's support.

More than half of the support is the part you have to add up. When three siblings split the cost evenly, often none of them has paid more than half, and the deduction sits with nobody unless the family arranges things on purpose. If you are dividing care costs with brothers and sisters, raise it with a preparer before the year closes. It is an uncomfortable conversation to have in November and a worse one to have in April. It also does not have to be settled in one phone call.

Long-term care insurance and the Minnesota credit

You cannot deduct what the policy pays out, because that is not money you spent. You can deduct the share you cover yourself once the policy reaches its daily or monthly limit. Families using a policy for care at home usually have a reimbursed amount and an amount they paid themselves. Give your preparer the amount you paid yourself.

Minnesota also offers a credit on the premiums themselves. Under Minn. Stat. 290.0672, the credit is 25 percent of qualifying long-term care insurance premiums that were not already deducted, capped at $100 for each qualified beneficiary, with a total of $200 for married couples filing jointly and $100 for everyone else. The statute requires the policy to carry a lifetime long-term care benefit of at least $100,000. The amounts are small and often go unclaimed, so mention the premiums to whoever prepares your return.

If you hire a caregiver directly

Paying a caregiver yourself changes your tax position. IRS Publication 926 for 2026 says a household employer must withhold and pay Social Security and Medicare taxes once cash wages reach $3,000 or more in the year for any one household employee. At twenty hours a week, most families pass $3,000 by spring.

Going through an agency moves that obligation. Publication 926 states that "if an agency provides the worker and controls what work is done and how it is done, the worker isn't your employee." The agency carries the payroll, the withholding, the workers compensation, and the background studies. We wrote separately about hiring a caregiver yourself compared with going through an agency, and taxes are one of the reasons families end up at an agency. Publication 502 also lets you count the Social Security, Medicare, federal unemployment, and state employment taxes you pay for an attendant who provides medical care, allocated the same way the wages are.

Plenty of families find this out partway through the year. If you have already been paying someone directly since the spring, it is fixable, and cleaning it up is routine work for a preparer.

Records to keep through the year

A preparer needs four things from you. Collect them as the year goes along. You do not need all four in place this week.

Invoices that show the date, the hours, and what was done on each visit. A line reading "home care services, March" gives a preparer nothing to allocate.
The practitioner's certification and the written plan of care, dated.
A note of how hours divide between personal care and housekeeping, if a caregiver does both.
Insurance statements showing what the policy reimbursed and when.

Most agencies itemize dates and hours as a matter of course, so ask yours whether the invoices show that. Abloom Senior Living bills privately and accepts long-term care insurance for care at home, which it provides in clients' own homes under a comprehensive home care license from the Minnesota Department of Health. Families who hire a caregiver on their own have to build that record themselves, usually in a spreadsheet. A dated line after each visit is enough.

A reasonable next step

None of this has to be settled today. If care is starting soon, do two things in the next week: ask your parent's clinic about the certification and the plan of care, and tell whoever prepares your return that care at home has begun, so they know to look for it next time.

If you are still working out hours and cost before any of this becomes a tax question, you can see how visits are structured and what care at home runs on our pricing page, or ask us to come look at the situation with you. Request a visit for in-home care and you will get a straight read on what the week would need to look like. We may not be the right fit for your family, and if we are not, we will say so and point you toward someone who is.

Frequently asked questions

Is in-home care tax deductible if my parent has no formal diagnosis?

Partly. IRS Publication 502 allows wages you pay for nursing-type services, including bathing and grooming, as a medical expense without reference to a diagnosis. The broader qualified long-term care services category is the one that requires a practitioner's certification of chronic illness and a prescribed plan of care, so without those documents you are working with the narrower rule.

Can I deduct what I pay for a parent who lives in her own home?

Possibly. Publication 502 allows medical expenses you paid for someone who would have been your dependent except for the gross income test or the joint return test, which is the situation many parents on Social Security and a pension are in. The support test still applies, so you need to have provided more than half of your parent's support for the year.

Does long-term care insurance reduce what I can deduct?

Yes, for the reimbursed portion. You can count what you paid out of pocket beyond the policy's limit. Minn. Stat. 290.0672 separately offers a Minnesota credit of 25 percent of qualifying premiums, capped at $100 per qualified beneficiary.

Do I owe payroll taxes if I pay a caregiver myself?

Often, yes. IRS Publication 926 for 2026 sets the threshold at $3,000 or more in cash wages to any one household employee during the year, at which point Social Security and Medicare taxes apply. Publication 926 also says that a worker provided by an agency that controls what work is done and how is not your employee.

Does Minnesota use the same 7.5 percent threshold as the federal return?

No. Minnesota's Schedule M1SA instructs filers to subtract 10 percent of federal adjusted gross income, and it can be filed even by taxpayers who did not file federal Schedule A, which helps households that take the federal standard deduction.

Sources

All field notes Arrange a visit