6 Tax Tips for Family Caregivers

(AARP.org) En español | If you’re paying all or part of the cost of caring for a parent or another relative, you may qualify for some federal tax breaks. And who couldn’t use the extra money?

Just make sure to outline all your costs and get someone to help you with your taxes, says Bonnie Speedy, vice president, AARP Foundation Tax-Aide, which offers free tax help from volunteers for people with low and moderate incomes, in conjunction with the IRS. AARP Foundation Tax-Aide has over 5,000 sites nationwide.

As the April tax filing deadline approaches, here are six ways family caregivers can save money on their taxes.

1. How does a relative qualify to become a dependent on your tax return?

Relatives are eligible to become a dependent on a caregiver’s tax return if their total income was less than $3,950 a year in 2014, excluding nontaxable Social Security and disability payments, and if the caregiver provided more than 50 percent of the relative’s support. If those criteria are met, caregivers can take a $3,900 tax exemption for each dependent. However, a word of caution is in order. Pensions, interest on bank accounts, dividends and withdrawals from retirement plans are counted as income. By the way, most relatives don’t have to live in your home to be considered your dependent.

2. When can a caregiver claim a tax benefit for a dependent’s medical costs?

If you claim a relative (a parent, spouse, step-parent, grandparent, sister, cousin, aunt or in-law, for example) as your dependent, you can claim medical deductions if you’re providing more than 50 percent of their support and if your total medical costs represented more than 10 percent of your adjusted gross income in 2014. You must meet the threshold on both counts. If the taxpayer is age 65 or older, the threshold is reduced from 10 percent to 7.5 percent.

3. Are caregiver tax deductions limited to just relatives?

No. Non-relatives could also qualify but only if they are part of the caregiver’s household for the entire tax year.

4. What other kinds of dependent expenses are deductible?

The cost for food, housing, medical care, clothing, transportation and even bathroom modifications that are required for medical reasons can qualify for tax deductions. The IRS allows caregivers to deduct the costs not covered by a health care plan for a relative’s hospitalization or for out-of-pocket costs for prescription drugs, dental care, copays, deductibles, ambulances, bandages, eyeglasses and certain long-term care services. Other items include acupuncture, adapters to TV sets and telephones for those who are hearing impaired, smoking cessation programs, weight-loss programs (if it’s part of a treatment for a specific disease or condition) and wigs if hair loss is because of a medical condition or treatment. Keep all your records to prove these expenses in the event of a tax audit.

If a caregiver works but pays for care for a relative who can’t be left alone, those costs may generate a tax credit, Speedy says.

5. What happens when more than one sibling wants to take the parent as a dependent on their tax form?

If more than one sibling is sharing the cost of the parent’s upkeep, only one can claim the parent as a dependent.

6. Can caregivers use their flexible spending accounts to pay for a relative’s eligible medical expenses?

Yes, a caregiver’s tax-free flex account may be used to cover expenses for both dependent and non-dependent relatives — as long as you’re responsible for more than 50 percent of their support. The FSA is a tax-advantaged account that allows an employee to set aside a portion of earnings to pay for qualified medical expenses. Caps for FSAs were typically set by employers over the years. A $2,500 federal cap was in place for 2014. What’s new: The IRS, if permitted by your employer, now allows an annual carryover of unused funds of up to $500 for 2014, but only for a period not to exceed 2 months, 15 days.

As more boomers take on caregiving responsibilities for their aging relatives, it’s important to understand the tax ramifications — and benefits — of their financial support, Speedy says.

“That’s what our [Tax-Aide] volunteers are trained to do — look at the shift in the caregiving situations [for] tax implications.”

Citation

http://www.aarp.org/home-family/caregiving/info-02-2013/6-tax-tips-for-family-caregivers.html

Carole Fleck contributed to this report.

Copyright 2017 AARP

 

Answers to Tax Questions Caregivers Ask Most

(AgingCare.com) With tax time comes rules, exceptions, exemptions, requirements – and lots of confusion. AgingCare has gathered a list of frequently asked questions that caregivers ask most, with responses from the IRS website.

Q: Can I claim my elderly parent who lives in my home as a dependent on my tax return?

A: You may claim your parent as a dependent if the following tests are met:

  1. You are not a dependent of another taxpayer.
  2. Your parent does not file a joint return.
  3. Your parent is a U.S. citizen, U.S. national, U.S. resident, or a resident of Canada or Mexico.
  4. You paid more than half of your parent’s support for the calendar year.
  5. Your parent’s gross income for the calendar year was less than the exemption amount.
  6. Your parent DOES NOT have to live with you in order to claim them as a dependent, if you’ve meet the above criteria. Relatives who quality who do not have to live with you include: mother, father, grandparent, stepmother, stepfather, mother-in-law, father-in-law.

(See Publication 17, Your Federal Income Tax, and Table 3-1 on page 27, “Overview of the Rules for Claiming an exemption for a Dependent.”)

Q: I am a caregiver and my elderly parent lives in my home. Can I file as head of household?

A: You may file as head of household if you meet the following requirements:

  1. You are unmarried or “considered unmarried” on the last day of the year.
  2. You may claim a dependency exemption for your parent.
  3. You paid more than half the cost of keeping up a home for your parent for the tax year.

Your dependent parent does not have to live with you. Your parent DOES NOT have to live with you in order to claim them as a dependent, if you’ve meet the above criteria. Relatives who quality who do not have to live with you include: mother, father, grandparent, stepmother, stepfather, mother-in-law, father-in-law.

(See Special rule for Parent , in Publication 17, under Qualifying Person. See also Publication 501: Exemptions, Standard Deduction, and Filing Information.)

Q: Can I claim modifications to my home to accommodate my parent’s medical condition as a medical expense?

Yes, but only if your parent was your dependent at the time the medical services were provided or at the time you paid the expense. Also, the amount of the allowable medical expense is the cost of the modification decreased by any resulting increase to the value of your home. Finally, your total deduction for medical and dental expenses must be reduced by 10 percent of your adjusted gross income (7.5 percent if either you or your spouse was born before January 2, 1949).

(See Publications 17 and 502 for additional information.)

Q: My parents occasionally give me money to offset some of the cost of their care. Do I have to pay taxes on these funds?

A: An amount of money that your parents give you to offset their expenses is not taxable to you, however, you should take this amount into account in determining whether your parents are your dependents.

(See Publication 501, Exemptions, Standard Deduction, and Filing Information)

Q: I pay for some of my parent’s expenses medical expenses. Can I deduct these expenses on my tax return?

A: If you can claim your parent as a dependent, you also may be able to claim a deduction for the portion of your parent’s medical or dental expenses that you paid. However, your total deduction for medical and dental expenses must be reduced by 10 percent of your adjusted gross income (7.5 percent if either you or your spouse was born before January 2, 1949).

(See Publication 17, pages 140-144, for additional information. See also Publication 501, Exemptions, Standard Deduction, and Filing Information; Publication 502, Medical and Dental Expenses.)

Q: As a condition of acceptance to their assisted-living facility, my parents relinquished all home ownership rights to the community. Does this arrangement have any tax consequences?

A: Yes, this transaction will be considered a sale of their home. The property was transferred for services.

(See Publication 523 “Selling your Home” for additional information.)

Q: My parent is suffering from dementia. I cash his/her monthly social security check and use the proceeds for his/her care. What are the tax consequences?

A: Your parent’s social security benefits are not taxable to you. However, in determining whether your parent is your dependent, you should consider the benefits used for your parent’s support as support provided by your parent.

(See Publication 501, Exemptions, Standard Deduction, and Filing Information, for additional information.)

Q: My parent signed his/her home over to me. Does this transaction have to be reported to the IRS?

A: Yes. If certain conditions apply, this transaction would be considered a taxable gift from your parent to you. Generally, your parent must file a gift tax return ( Form 709) if any of the following apply:

  1. Your parent gave gifts to at least one person (other than his/her spouse) that are more than the annual exclusion for the year. Check Publication 950 for the annual exclusion.
  2. Your parent and his/her spouse are splitting a gift.
  3. Your parent gave someone (other than his/her spouse) a gift of a future interest that he or she cannot actually possess, enjoy, or receive income from until some time in the future.
  4. Your parent gave his/her spouse an interest in property that will be ended by some future event

NOTE: If any of the above conditions apply, your parent is required to file a Form 709, even if a gift tax is not payable.

(See Publication 950 for additional information on gifts.)

Q: I received a death benefit from my parent’s life insurance policy. Do I have to pay taxes on that money?

A: Life insurance proceeds paid to you because of the death of the insured person are not taxable unless the policy was turned over to you for a price. This is true even if the proceeds were paid under an accident or health insurance policy or an endowment contract. However, interest income received as a result of life insurance proceeds may be taxable.

(See Publication 525 for additional information.)

Links to IRS Documents Referenced in this Article

Publication 17: Your Federal Income Tax

Publication 501: Exemptions, Standard Deductions and Filing Information

Publication 502: Medical and Dental Expenses

Publication 523: Selling Your Home

Publication 525: Taxable and Non-Taxable Income

Publication 950: Estate and Gift Taxes

Citation

https://www.agingcare.com/articles/caregiver-tax-questions-and-irs-forms-148709.htm

By Marlo Sollitto

Copyright 2016 AgingCare, LLC.

 

Alzheimer’s Disease: Tax Deductions and Credits

(Alz.org) As a caregiver, you likely pay for some care costs out-of-pocket. Because of this, you may qualify for tax benefits from the Internal Revenue Service (IRS). Tax rules are complex and can change. Be sure to get advice from your tax adviser or accountant before filing your returns.

  • Medical expenses
  • Child and Dependent Care Credit
  • Flexible spending account
  • State tax credits

Medical Expenses

The person with dementia may be considered your dependent for tax purposes. If so, you may be allowed to itemize his or her medical costs. Currently, you may deduct only the amount by which your total medical expenses exceed 7.5 percent of your adjusted gross income. Beginning in 2013, you may deduct only the amount by which your total medical expenses exceed 10 percent of your adjusted gross income. Only expenses that have not been reimbursed by insurance can be counted toward the medical expense deduction.

See IRS Publication 502: Medical and Dental Expenses, for a complete list of allowable expenses. Here’s a brief list:

  • Medical fees from doctors, laboratories, assisted living residences, home health care and hospitals
  • Cost of prescription drugs
  • Cost of transportation to receive medical care
  • Home modifications costs such as grab bars and handrails
  • Personal care items, such as disposable briefs and food

See IRS Publication 501: Exemptions, Standard Deductions and Filing Information to learn more about claiming the person with dementia as a dependent.

Child and Dependent Care Credit

If you paid someone to care for the person with dementia so you could work or look for work, you may be able to claim the “Child and Dependent Care Credit” on your federal income tax return. If eligible, you would be allowed a credit of up to 35 percent of your qualifying expenses, depending upon your adjusted gross income.

To qualify:

  • You must have earned income
  • The person with dementia must be unable to physically or mentally care for him or herself
  • The person with dementia must be claimed as a dependent on your tax return

See IRS Publication 503: Child and Dependent Care Expenses for more information.

TIP: If you pay someone to come to your home and care for the person with dementia, you may be a household employer and may have to withhold and pay Social Security and Medicare tax and pay federal unemployment tax. See IRS Publication 926: Household Employer’s Tax Guide.

Flexible Spending Account

If the person with dementia is a dependent under the tax rules, you might be able to use your own workplace flexible spending account (FSA). A flexible spending account allows payment for out-of-pocket medical expenses and dependent care expenses with pretax dollars, for a potential savings of about 20 to 30 percent.

State Tax Credits

Many states have additional tax deductions or tax credits to provide financial relief to caregivers. These tax programs build on the federal tax credit, which reduces the amount of income taxes a family owes. Each state program differs by name and eligibility requirements.

Help Is Available

The Internal Revenue Service (IRS) offers free tax forms and publications explaining various tax deductions and credits.

AARP’s Tax-Aide program provides free tax preparation and counseling information to all low and middle-income taxpayers, even if you are not an AARP member.

Other Resources

Note: This information is not intended as tax advice. The determination of how tax laws affect a taxpayer depends on the taxpayer’s situation. A taxpayer may be affected by exceptions to the general rules and by other laws not discussed here. Therefore, taxpayers are encouraged to seek advice from a competent tax professional.

Citation

http://www.alz.org/care/alzheimers-dementia-tax-deductions-credits.asp?WT.mc_id=enews2017_01_17&utm_source=enews-aff-&utm_medium=email&utm_campaign=enews-2017-01-17

Copyright © 2017 Alzheimer’s Association. All rights reserved.

 

You Can Get Paid as a Family Caregiver

(AARP) Medicaid is making it easier for families to afford caring for a loved one at home.

Getting paid as a family caregiver seems about as likely as winning the lottery. Just ask the nation’s 40 million family caregivers — spouses, adult children and other relatives — 34 million of whom provide unpaid care to someone 50 or older.

Medicare does not pay family caregivers, who traditionally have assumed these duties without pay.

But with older adults living and needing care longer and wanting to stay in their own homes, attitudes and public policies about family caregiving are slowly changing.

Thanks to innovations in Medicaid and the Department of Veterans Affairs, older adults and people with disabilities are designing their own in-home care programs and hiring family members (and, in rare cases, spouses). There’s still a long way to go, though.

“These programs are so small. They’re not picking up enough people,” says Gail Gibson Hunt, president of the National Alliance for Caregiving.

With those caveats in mind, here are some ways family caregivers can be compensated.

Medicaid

If your loved one is eligible for Medicaid, check to see if your state has a participant-directed services program. These Medicaid programs are aimed at keeping people of all ages and disabilities independent and in their own homes.

Typically, the participant, working with a caseworker, draws up a care plan and hires a worker of choice, who can be a family member (though in many states not a spouse) to help with such activities as bathing, preparing meals or feeding.

Started as pilot projects called Cash & Counseling in the 1990s, consumer-directed programs expanded under the Affordable Care Act. Currently about 1 million people participate in self-directed Medicaid plans. The Centers for Medicare & Medicaid Services (CMS) provide financial incentives to states — as much as 6 percent of the cost — to offer the self-directed option.

“The federal government has been extremely supportive of self-direction,” granting waivers for states to develop programs, said Suzanne Crisp, a senior adviser for PPL Consulting and former director of program design and implementation at the National Resources Center for Participant-Directed Services at Boston College.

Under self-directed plans, the participant (or a surrogate in cases of mental impairment) can have an overall budget for goods and services based on an assessment of needs. The participant negotiates the caregiver’s rate of pay at or above the state minimum wage.

A financial management services firm typically performs such employer duties as collecting time sheets and issuing paychecks, filing taxes, workers’ compensation and other insurance.

Programs go by different names and operate differently in each state (if they have them).

Through California’s In-Home Supportive Services (IHSS) program, run by Medi-Cal, California’s Medicaid, 500,000 seniors, blind or people with disabilities pay friends, family members and in some instances, spouses, for help with housework, meal preparation and personal care.

Training materials warn, “It can be tricky to be the paid IHSS care provider to a relative or close friend,” noting that the caregiver is an employee in a program with a lot of rules.

Check with your local Area Agency on Aging for more information.

Veterans

The Department of Veterans Affairs has several programs that pay family caregivers under certain circumstances.

Veteran-Directed Home and Community Based Services gives veterans of all ages who otherwise would be in nursing homes the ability to tailor their long-term care at home, including hiring family members or friends as caregivers.

To qualify, a veteran must need assistance with at least three activities of daily living or have a significant cognitive impairment, and be enrolled in the VA for health care. There’s no income limit, but higher-income vets are subject to a copayment.

“The veteran is the employer,” said Daniel Schoeps, the VA’s director of purchased long-term services and support.

“It’s up to the veteran how much they pay the workers” — although the guideline is $20 an hour maximum.

The veteran has a monthly budget based on physical condition that ranges from $1,200 to $4,000. The average is $2,000 a month. The vet doesn’t receive a check; the state or the aging office handles payments to the caregiver, employee taxes, and fees for counseling and financial management services.

The veteran-directed program started in 2009 and is available through 61 VA medical centers in 35 states. About 1,900 veterans participate, a fraction of the 50,000 veterans who receive home health care on any given day. The VA hopes to have the program operating in all 150 medical centers within three years.

The VA offers home caregivers of veterans who were severely injured or suffered mental health issues since 9/11 special benefits through Comprehensive Assistance for Family Caregivers, a congressionally mandated program. The caregiver may be a spouse, family member or friend.

“Just because we’re talking about post-9/11 veterans doesn’t mean we’re talking about 21- and 22-year-olds,” said Meg Kabat, national director of the VA’s Caregiver Support program.

Many who were injured in the early 2000s had already been in the service many years.

About 34 percent of the caregivers in the comprehensive assistance program are 41 to 64, and 15 percent are 50 or older. Participants receive a stipend, travel expenses, health insurance and not less than 30 days a year respite care.

“They’re paid a financial stipend that represents the sacrifices they make in taking care of the veteran,” Kabat said.

The payment ranges from $600 a month to $2,300 a month, depending on geographical area and the extent of the disability.

The payment is not taxed, and the caregiver does not earn work credits toward Social Security and Medicare. That can be an issue for younger spouses.

About 24,000 caregivers participated in fiscal 2015. About 300 to 400 new caregivers join the program each month, and several hundred a month leave it because veterans improve through rehab and other services.

A veteran who qualifies for the needs-based VA pension and has served one day in wartime, or a surviving spouse, may be eligible for Aid & Attendance. The vet may pay a family member, though not a spouse, for help with activities of daily living, such as bathing, eating and dressing.

Housebound is a separate program that allows VA pension-eligible veterans who need help ambulating outside the home to pay a family caregiver. In both Aid & Attendance and Housebound, the caregiver must report the income to the IRS.

Peer support group, face-to-face classes and online training are available to anyone caring for a veteran or to veterans caring for nonveterans. Learn more at caregiver.va.gov.

Your Family Member Pays You

If your loved one can afford to pay you directly for home care, congratulations. You’re an employee, and you’ll need to pay federal, state and local taxes.

“If you’re paid under the table, you’re in violation of the law,” warned Hyman G. Darling, an attorney in Springfield, Mass., and president-elect of the National Academy of Elder Law Attorneys.

As for accepting payment as a “gift,” Darling says, don’t.

“People do it all the time, but it’s not right. If someone makes a gift in return for services, it’s no longer a gift. It’s taxable to the recipient.”

He suggests the caregiver consider training as a home health aide by an agency and then working directly for the agency, which will file the necessary paperwork. In some cases, the agency may be able to bill Medicaid or Medicare, he said. Check with your local Area Agency on Aging.

If your loved one planned ahead and has long-term care insurance, some hybrid policies allow payments to family caregivers.

It may seem odd, but if you become a family caregiver paid by the family member, sign a contract. It should specify the services being performed and the payment amount, Darling said.

The documentation will come in handy if the loved one later needs to qualify for Medicaid. Under the “look-back” provision, Medicaid will examine five years of records and could say the payments were a gift, Darling said.

“If you’re continuing to pay someone and not reporting the payments as taxable income, each payment extends the five-year period.” And that could jeopardize your loved one from being qualified for Medicaid.

Citation

http://www.aarp.org/home-family/caregiving/info-2016/you-can-get-paid-as-a-family-caregiver.html?intcmp=Outbrain&obref=obinsite

Marsha Mercer is a Washington, D.C.-based journalist.

Copyright 2017 AARP

 

“How Can I Get Paid for Taking Care of My Elderly Parents?”

(AgingCare.com with Marlo Sollitto) What is the number one question caregivers ask in the AgingCare.com Support Groups?

“How do I get paid for caregiving?”

Unfortunately, there’s no cut-and-dry answer. Programs and assistance vary widely by state and individual circumstances. But we hope to provide our caregivers with some options and programs to explore.

Administration on Aging

The AoA administers many national programs and services for elders, including health insurance counseling, legal assistance, protection from elder abuse and long-term care.

Area Agency on Aging

There is a federally-mandated Area Agency on Aging in your county or city. This agency is staffed by professionals who know every elder program and service, including available funding sources, in your area.

Gather up as much information as you can about you and your parent’s situation and finances, and make an appointment to meet with a counselor at the Area Agency on Aging. The staff person can advise regarding programs and qualifications and even help prepare the necessary applications and documentation. You can find your local Area Agency on Aging in our directory and contact them directly to schedule an appointment.

Veterans

The VA Improved Pension was established to help veterans who are in financial need. A vet does not have to have had long years of service to qualify for the VA Improved Pension. The veteran needs to have been in service for at least 90 days of active duty with 1 day beginning or ending during a period of War and have been discharged honorably. There are three tiers of assistance:

  • Level 1: Basic Pension for those with the lowest income
  • Level 2: Housebound Benefits for those with a physician certifying the applicant is in need of some daily help
  • Level 3: Allows the highest countable income, provides the highest benefit, and is called Aid and Attendance (A and A).

The Improved Pension for A and A may be granted when the veteran or the surviving spouse requires the regular attendance of another person to assist in eating, bathing, dressing and undressing. It may also include individuals who are blind, in a nursing home or assisted living facility due to mental or physical incapacity. Learn more about Veterans Assistance.

Medicaid Cash and Counseling (Participant/Consumer or Self-Directed Programs)

If your elderly parent is eligible for Medicaid, Medicaid’s Cash and Counseling program may enable direct payments to be made to you, the caregiver; however, the program is currently only available in a limited number of states (at the time of print, these states included Alabama, Illinois, Iowa, Kentucky, Michigan, Minnesota, New Mexico, Pennsylvania, Rhode Island, Vermont, Washington and West Virginia). To find out if your state has a Cash and Counseling program, contact your local Medicaid office. Cash and Counseling programs are often also referred to as “Participant/Consumer or Self-Directed Programs.”

Medicaid

People with low income and few assets other than their home may be eligible for Medicaid health care coverage. This includes in-home care and personal care, such as help with bathing, dressing, cooking, cleaning, eating, moving around, and similar activities of daily living.

Medicaid does cover some of the costs of long-term care, but your elderly mom or dad must meet many eligibility requirements, including functional and financial requirements. Medicaid is a state-run program.

Each state has its own rules about who is eligible and what is covered under Medicaid. Medicaid planning often requires forethought, because a person must have very few assets to qualify for Medicaid coverage. The limit may be as low as $2,000, excluding the value of a home and possibly a car. A person must “spend down” before becoming eligible.

Medicare

Medicare is our country’s health insurance program for people age 65 or older, some disabled people under age 65, and people of all ages with End-Stage Renal Disease. Medicare has Two Parts:

  • Medicare Part A (Hospital Insurance)
  • Medicare Part B (Medical Insurance) (Most people pay monthly for Part B)

You can choose different ways to get the services covered by Medicare. Depending on where you live, you may have different choices. In most cases, when you first get Medicare, you are in Original Medicare.

In addition, if your elderly parent is a Medicare beneficiary, they might be eligible for Medicare prescription drug coverage, regardless of income, health status or current prescription expenses.

Our Medicare and Medicaid section will help you navigate through these programs.

Supplement Security Income (SSI)

Supplemental Security Income (SSI) program pays benefits to disabled adults. SSI benefits also are payable to people 65 and older without disabilities who meet the financial limits. SSI pays benefits to the elderly and certain family members.

Unlike Social Security benefits, SSI benefits are not based on your elderly parent’s prior work or a family member’s prior work. SSI beneficiaries may also be eligible for food stamps in every state except California. Your elderly mom or dad’s living arrangement is another factor used to determine how much SSI they can get. Benefits may vary depending on whether the senior lives:

  • In their own home
  • In someone else’s household
  • In a group care facility In an institution

Family Caregiver Support Program

Family Caregiver Support Program (FCSP) offers support services to family caregivers of persons age 60 and older, or adults of any age with dementia. Services include information to caregivers about available support services; assistance to caregivers in gaining access to supportive services; individual counseling, support groups and caregiver training; respite care; and supplemental services (such as emergency response systems and home modifications).

To access your local FCSP, contact your local Area Agency on Aging (can also be found in your phone book.)

Tax Breaks

If you’re supporting an elderly parent, you may qualify for some tax relief. As a caregiver, you might be able to claim your elderly parent as a dependent on your taxes. You might also be able to deduct your medical expenses.

IRS Publication 501 gives details on dependency requirements, including caregiver income phase-out levels. In addition, you must be providing over half of their financial support for food, housing, medical, transportation, etc.

If the person lives with you, include a reasonable percentage of your mortgage, utilities and other household costs in determining your level of support. Those who are in an assisted living or long term care facility can qualify as dependents if the income and support levels are met.

Visit our Tax Tips for Caregivers section to learn more about the tax breaks available to family caregivers.

Counseling for the Elderly

The Tax Counseling for the Elderly (TCE) Program provides free tax help to people age 60 and older. Trained with IRS materials and certified by an IRS examination, a network of volunteers provide tax counseling and basic Federal income tax return preparation services at community locations across the nation. Many of these community locations also offer free electronic filing services.

Benefits Checkup

BenefitsCheckUp is the nation’s most comprehensive Web-based service to screen for benefits programs for seniors with limited income and resources. BenefitsCheckUp includes more than 1,700 public and private benefits programs from all 50 states and the District of Columbia, such as:

  • Prescription drugs
  • Nutrition (including Supplemental Nutrition Assistance (SNAP)/Food Stamps)
  • Energy/utility assistance
  • Financial assistance
  • Legal aid
  • Health care
  • Housing
  • In-home services
  • Transportation

Government Benefits

GovBenefits.gov is the official benefits website of the U.S. government, with information on over 1,000 benefit and assistance programs. Gather up all the information you can on your elderly parent’s health, disability, income, wealth (as in property owned), whether a military veteran, education level and more. Access this site and answer every question that you can. Then, push the button and, within minutes, the site will respond with a list, details and access information for many beneficial government programs and services.

Home Equity Conversion Mortgages (Reverse Mortgages)

The purpose of the program is to enable elderly homeowners to convert equity in their homes to monthly streams of income, or except for Texas, lines of credit. Home Equity Conversions are also known as reverse mortgages.

Contacting Resources

How to contact the resources mentioned in this article that might help caregivers get paid for caregiving:

Administration on Aging

http://www.aoa.gov/

Area Agency on Aging

Contact the National Association of Area Agencies on Aging at 202-872-0888. To find your local Area Agency on Aging, visit: Listing of Area Agencies on Aging

Veteran’s Association

VA Main website
Information sheet on VA pensions

Cash and Counseling

Call (617) 552-6582 or visit the Cash and Counseling website.

Medicaid

Call Medicaid at 877-267-2323, visit the Medicaid website, or visit the Medicaid section of AgingCare.com.

Medicare

Call the Medicare toll-free help line at 800-633-4227 or visit the Medicare website.

Supplemental Security Income (SSI)

Call 800-772-1213 or visit the Supplemental Security Income website.

IRS Free Tax Counseling for Seniors

Call 202-283-0189 or visit the IRS website.

Benefits Checkup

Visit the Benefits Checkup website

Government Benefits

Call 800-333-4636 or visit the Government Benefits website.

Reverse Mortgages

Call (800) 569-4287 or visit the HUD website.

Citation

https://www.agingcare.com/Articles/how-to-get-paid-for-being-a-caregiver-135476.htm

By

©2016 AgingCare, LLC. All rights reserved.

 

Caregivers: Resources for Discount Medications

(Family Caregiver Alliance) Caregivers everywhere are familiar with the high-wire act involved in paying for medications for a loved one in their care. Already working within tight budgets, families find it difficult to absorb recent increases in prescription costs. Carol Thomson, for example, pays $700-800 a month for her mother’s medications, and even though a small grant helped cover the cost over the past year, the grant is about to run out. So far, she has made 30 or 40 phone calls in an attempt to find discounted medications. Fortunately, a few generous physicians have helped her with free samples.

Caregiver Lucille Marinko will be forced to give up the attendant care which affords her a little respite time, because she is unable to pay for both the eight medications she needs for her mother and the additional help.

As we know, Medicare does not cover the cost of prescription medicines. For a while, Medicare supplemental policies—in particular the HMO policies—did cover prescriptions to a greater or lesser extent—sometimes with a cap on how much could be spent each year, sometimes with a given amount for co-pay, and sometimes with options for using generic medications.

However, because prescription costs are the largest cause of the increase in the cost of medical care in the United States—rising at twice the rate of inflation—most insurance companies have put limits on their coverage. Congress continues to debate different prescription coverage programs for Medicare recipients. Meanwhile, caregivers continue to scramble to find money to pay for drugs as well as the myriad other expenses involved in caring for someone with a long-term illness.

Often the people struggling to pay for these medications don’t meet traditional low-income guidelines to qualify for Medi-Cal. When people do qualify for Medi-Cal, the cost of their medications is covered as long as the medications they require are on the formulary (list of approved drugs). When a complicated illness is involved, however, even Medi-Cal eligible patients may need medications not covered by the Medi-Cal formulary. A physician can apply to Medi-Cal for an exemption for his patient; however, the process is time-consuming. Others eligible for Medi-Cal must pay a share of cost approximately equal to their out-of-pocket expenses, leaving a minimal amount each month to live on.

Those not eligible for Medi-Cal face an even more daunting process, as one often must apply to each pharmaceutical company separately, and each company has different criteria to qualify for lower prices.

As the government and insurance companies struggle with this problem, some help is available—although it may take access to a computer and considerable time to find the right program.

Help on the Web

Other Resources

  • Although it is often necessary to apply to each drug company for their particular discount card, the Association of Chain Drug Stores is promoting a Pharmacy Care One Card that links the company cards. Call (703) 837-4244.
  • Those with Kaiser coverage can call member services to apply to their program for patients in need.
  • Costco’s pharmacy offers some of the lowest prices on medication, and Costco membership is not required.
  • Eisai and Pfizer have an Aricept Assistance Program for people with dementia. Call (800) 226-2072.
  • Your local Area Agency on Aging, through their HICAP program (Health Insurance Counseling and Advocacy Program) will also have information on drug programs.
  • People who qualify for Veteran’s benefits can get lower cost prescriptions through the VA—see http://www.va.gov/health_benefits/.

Prescription drug discount programs change quickly, and the available options may be different or even eliminated by the time you read this. If you need help finding the right program for you, call your local Area Agency on Aging or HICAP program or FCA for assistance, (800) 445-8106.

Citation
https://www.caregiver.org/resources-discount-medications
Copyright © 2015 Family Caregiver Alliance. All rights reserved.

 

6 Tax Tips for Family Caregivers

(AARP.org) En español | If you’re paying all or part of the cost of caring for a parent or another relative, you may qualify for some federal tax breaks. And who couldn’t use the extra money?

Just make sure to outline all your costs and get someone to help you with your taxes, says Bonnie Speedy, vice president, AARP Foundation Tax-Aide, which offers free tax help from volunteers for people with low and moderate incomes, in conjunction with the IRS. AARP Foundation Tax-Aide has over 5,000 sites nationwide.

As the April tax filing deadline approaches, here are six ways family caregivers can save money on their taxes.

1. How does a relative qualify to become a dependent on your tax return?

Relatives are eligible to become a dependent on a caregiver’s tax return if their total income was less than $3,950 a year in 2014, excluding nontaxable Social Security and disability payments, and if the caregiver provided more than 50 percent of the relative’s support. If those criteria are met, caregivers can take a $3,900 tax exemption for each dependent.

However, a word of caution is in order. Pensions, interest on bank accounts, dividends and withdrawals from retirement plans are counted as income. By the way, most relatives don’t have to live in your home to be considered your dependent. People paying for the cost of care for a dependent relative may be eligible for some federal tax breaks.

2. When can a caregiver claim a tax benefit for a dependent’s medical costs?

If you claim a relative (a parent, spouse, step-parent, grandparent, sister, cousin, aunt or in-law, for example) as your dependent, you can claim medical deductions if you’re providing more than 50 percent of their support and if your total medical costs represented more than 10 percent of your adjusted gross income in 2014. You must meet the threshold on both counts. If the taxpayer is age 65 or older, the threshold is reduced from 10 percent to 7.5 percent.

3. Are caregiver tax deductions limited to just relatives?

No. Non-relatives could also qualify but only if they are part of the caregiver’s household for the entire tax year.

4. What other kinds of dependent expenses are deductible?

The cost for food, housing, medical care, clothing, transportation and even bathroom modifications that are required for medical reasons can qualify for tax deductions. The IRS allows caregivers to deduct the costs not covered by a health care plan for a relative’s hospitalization or for out-of-pocket costs for prescription drugs, dental care, copays, deductibles, ambulances, bandages, eyeglasses and certain long-term care services.

Other items include acupuncture, adapters to TV sets and telephones for those who are hearing impaired, smoking cessation programs, weight-loss programs (if it’s part of a treatment for a specific disease or condition) and wigs if hair loss is because of a medical condition or treatment. Keep all your records to prove these expenses in the event of a tax audit.

If a caregiver works but pays for care for a relative who can’t be left alone, those costs may generate a tax credit, Speedy says.

5. What happens when more than one sibling wants to take the parent as a dependent on their tax form?

If more than one sibling is sharing the cost of the parent’s upkeep, only one can claim the parent as a dependent.

6. Can caregivers use their flexible spending accounts to pay for a relative’s eligible medical expenses?

Yes, a caregiver’s tax-free flex account may be used to cover expenses for both dependent and non-dependent relatives — as long as you’re responsible for more than 50 percent of their support. The FSA is a tax-advantaged account that allows an employee to set aside a portion of earnings to pay for qualified medical expenses. Caps for FSAs were typically set by employers over the years.

A $2,500 federal cap was in place for 2014. What’s new: The IRS, if permitted by your employer, now allows an annual carryover of unused funds of up to $500 for 2014, but only for a period not to exceed 2 months, 15 days.

As more boomers take on caregiving responsibilities for their aging relatives, it’s important to understand the tax ramifications — and benefits — of their financial support, Speedy says.

“That’s what our [Tax-Aide] volunteers are trained to do — look at the shift in the caregiving situations [for] tax implications.”

Citation

http://www.aarp.org/home-family/caregiving/info-02-2013/6-tax-tips-for-family-caregivers.html

Carole Fleck contributed to this report.

Copyright 2016  AARP

 

Caregiver Tax Deductions and Credits

(Alzheimer’s Association) As a caregiver, you likely pay for some care costs out-of-pocket. Because of this, you may qualify for tax benefits from the Internal Revenue Service (IRS). Tax rules are complex and can change. Be sure to get advice from your tax adviser or accountant before filing your returns.

Medical Expenses

The person with dementia may be considered your dependent for tax purposes. If so, you may be allowed to itemize his or her medical costs. Currently, you may deduct only the amount by which your total medical expenses exceed 7.5 percent of your adjusted gross income. Beginning in 2013, you may deduct only the amount by which your total medical expenses exceed 10 percent of your adjusted gross income. Only expenses that have not been reimbursed by insurance can be counted toward the medical expense deduction.

See IRS Publication 502: Medical and Dental Expenses, for a complete list of allowable expenses. 
Here’s a brief list:

  • Medical fees from doctors, laboratories, assisted living residences, home health care and hospitals
  • Cost of prescription drugs
  • Cost of transportation to receive medical care
  • Home modifications costs such as grab bars and handrails
  • Personal care items, such as disposable briefs and food

See IRS Publication 501: Exemptions, Standard Deductions and Filing Information to learn more about claiming the person with dementia as a dependent.

Child and Dependent Care Credit

If you paid someone to care for the person with dementia so you could work or look for work, you may be able to claim the “Child and Dependent Care Credit” on your federal income tax return. If eligible, you would be allowed a credit of up to 35 percent of your qualifying expenses, depending upon your adjusted gross income.

To qualify:

  • You must have earned income
  • The person with dementia must be unable to physically or mentally care for him or herself
  • The person with dementia must be claimed as a dependent on your tax return

See IRS Publication 503: Child and Dependent Care Expenses for more information.

TIP: If you pay someone to come to your home and care for the person with dementia, you may be a household employer and may have to withhold and pay Social Security and Medicare tax and pay federal unemployment tax. See IRS Publication 926: Household Employer’s Tax Guide.

Flexible Spending Account

If the person with dementia is a dependent under the tax rules, you might be able to use your own workplace flexible spending account (FSA). A flexible spending account allows payment for out-of-pocket medical expenses and dependent care expenses with pretax dollars, for a potential savings of about 20 to 30 percent.

State Tax Credits

Many states have additional tax deductions or tax credits to provide financial relief to caregivers. These tax programs build on the federal tax credit, which reduces the amount of income taxes a family owes. Each state program differs by name and eligibility requirements.

Help Is Available

The Internal Revenue Service (IRS) offers free tax forms and publications explaining various tax deductions and credits.

AARP’s Tax-Aide program provides free tax preparation and counseling information to all low and middle-income taxpayers, even if you are not an AARP member.

Note: This information is not intended as tax advice. The determination of how tax laws affect a taxpayer depends on the taxpayer’s situation. A taxpayer may be affected by exceptions to the general rules and by other laws not discussed here. Therefore, taxpayers are encouraged to seek advice from a competent tax professional.

More Resources from the Alzheimer’s Association

Citation
https://www.alz.org/care/alzheimers-dementia-tax-deductions-credits.asp

Copyright © 2016  Alzheimer’s Association®. All rights reserved.