Many adults in the “sandwich generation” find themselves balancing the costs of raising children while also helping to care for their aging parents. With these additional financial responsibilities, it’s natural to wonder: are there any tax breaks available when supporting your parents?
Under current tax law, personal exemptions are no longer available, meaning you cannot claim a deduction simply for having a dependent parent. These exemptions were eliminated under the Tax Cuts and Jobs Act (TCJA), which is set to expire at the end of 2025. While Congress may make changes in future legislation, the most recent proposals do not include bringing back personal exemptions.
Additionally, the $500 credit for “other dependents” (such as parents who qualify as dependents) is scheduled to expire after 2025.
Even without personal exemptions, there are still situations where supporting your parents may provide tax benefits. To claim a parent as your dependent, you generally must provide more than half of their total support. Support can include:
Food
Housing
Clothing
Medical care
Transportation
One of the most valuable opportunities comes from medical expense deductions. If you pay for your parent’s medical costs, you may be able to deduct those expenses on your own tax return, provided that:
You itemize your deductions, and
The total qualified medical expenses for yourself, your spouse, and your dependents exceeds 7.5% of your adjusted gross income (AGI).
This can include doctor visits, prescription medications, hospital stays, and certain long-term care services.
If you’re covering significant expenses for your parents, keep detailed records of what you pay and what qualifies as support. This documentation will be important when working with your tax advisor to determine whether you can benefit from available deductions.
While personal exemptions are no longer part of the tax code, there are still potential ways to reduce your tax burden if you’re helping support your parents. Always review your situation with a tax professional to make sure you’re maximizing available benefits.
Associate Partner
Julie has over 20 years of experience in public and private accounting, representing varied clientele including the medical, legal, and real estate industries and trusts.
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