Family caregivers spent an average of $11,508 out of pocket per year, according to AARP research published in October. In 2021, the figure was $7,242.
That works out to about 31% of household income on average. For caregivers in households earning under $40,000, the share was 76%.
Most of the money goes to everyday bills. Household costs such as food, rent and mortgage payments made up 42% of the total, and medical costs another 29%.
The tax code will not refund any of it, but several provisions can lower what the help ends up costing.
The figures below apply to 2026 returns, which are due April 15, 2027.
1. Claim the person you support as a dependent
You can count a parent as your dependent even if they live across town or across the country. You generally must pay more than half of their support, and their gross income for 2026 must be under $5,300.
Social Security benefits that are not taxable generally do not count toward that gross income limit, so a parent living mostly on Social Security may still qualify.
The support test is stricter. Money your parent spends on their own living costs, including from those Social Security checks, counts as support they provided, so add up both sides before assuming you cover more than half.
Each relative who qualifies can bring a $500 credit for other dependents, and the IRS sets several other tests for dependents beyond support and income.
2. File as head of household
An unmarried caregiver whose parent qualifies as a dependent may be able to file as head of household, even if the parent lives elsewhere.
The key requirement is paying more than half the cost of keeping up the parent’s main home for the year, and IRS rules allow that home to be a rest home or home for the elderly.
The standard deduction alone makes the difference visible. For 2026, it is $24,150 for head of household, compared with $16,100 for a single filer.
Head of household tax brackets are also wider, so more income is taxed at lower rates.
3. Deduct the medical bills you pay
Medical costs you pay for a dependent count toward your own medical deduction. So do costs for someone who would be your dependent but for the fact that their gross income is too high, according to IRS Publication 502.
In other words, the $5,300 income limit does not block this break.
Eligible costs can include copays, prescriptions, qualified long-term care services, nursing home care when the main reason for being there is medical care, and home changes such as entrance ramps and bathroom railings.
Only the total above 7.5% of your adjusted gross income is deductible, and you have to itemize, so this break tends to pay off in years with large bills. Medical spending averaged $3,313 a year among caregivers in the AARP study.
Prescriptions are often a place to cut before tax time, and there are ways to find lower prices on a parent’s medications.
4. Use the bigger dependent care credit
Despite its name, the child and dependent care credit covers adults. If a parent or spouse who cannot care for themselves lives with you for more than half the year, adult day care and in-home help that let you work or look for work can qualify.
For 2026, the top credit rate rose to 50% from 35%, according to the draft 2026 instructions for Form 2441 for child and dependent care expenses. That top rate is reserved for low incomes.
Married couples with adjusted gross income from $43,000 to $150,000 stay at 35%, which works out to as much as $1,050 on the $3,000 expense limit for one person.
5. Put more into a dependent care FSA
For 2026, the federal cap on an employer’s dependent care flexible spending account, or FSA, rose to $7,500 from $5,000, but your employer must adopt the higher limit before you can use it. That money comes out of your paycheck before taxes.
If your employer’s open enrollment is still underway, this is usually the window to sign up or raise your contribution for 2027.
The account follows the same qualifying-person rules as the credit, so the parent generally has to live with you and be unable to care for themselves. Dollars run through the account reduce the expenses you can claim for the credit, so the same bill cannot count twice.
6. Sign a multiple support agreement with your siblings
When siblings split a parent’s costs, often no one pays more than half, and no one can claim the parent. A multiple support agreement solves that.
If the siblings together provide more than half the support, any one sibling who contributed more than 10% can claim the parent. Each of the other siblings who contributed more than 10% signs a statement agreeing not to, and the sibling who claims the parent attaches IRS Form 2120 to their return.
The agreement also decides who gets the medical deduction. Under Publication 502, medical bills paid by the other siblings in the agreement cannot be deducted by anyone. Families with big medical bills may want the sibling who pays them to be the one who claims the parent.
Paying one sibling for hands-on care is a separate issue. Without a written agreement, those payments can put a parent’s future Medicaid eligibility at risk.
When the bills reach your nest egg
Some of the heaviest spending in the AARP study came from caregivers already stretched. Those who dipped into retirement savings spent an average of $17,907 a year on care, about 49% of their income.
Dementia care averaged $15,846, compared with $10,221 for care without dementia, a sign that caregiving costs tend to climb as needs grow.
If care has started to draw on your own retirement savings and you have at least $100,000 in investable assets, you can find a financial advisor through Advisor.com to plan withdrawals, taxes and how long your money needs to last. A tax preparer can confirm which of the six breaks fit your 2026 return before you file.
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