A growing number of people provide care and assistance for their relatives This support can include paying for a loved one's medical expenses, transportation to and from the doctor's office, covering the costs of prescriptions, or even remodeling this person's home to make it safer and more accessible.

Rather be out that money with no hopes of recouping any of it, people can offset their caregiver expenses by claiming the person whom they support as a dependent. Before they claim this person or any caregiver deductions, they should understand the criteria required for doing so first.

Income Limitations

As with many tax deductions, people who want to claim a loved one as a dependent must first meet some income criteria. The person whom they plan to claim must make less than $3900 a year, excluding any income that he or she gets from Social Security or disability.

Income that can be counted includes interest from bank accounts, pension payments, and dividends from investments. Before adding a person to their taxes, people should make sure that this individual has received less than the stipulated amount of income that particular tax year.

Provider Cost Requirements

Along with income limitations, people also must meet certain criteria before claiming a loved one as a dependent. They must provide at least 50 percent of that person's support and use at least 10 percent of their adjusted gross income to cover this individual's medical expenses.

Some people make the mistake of believing they only have to meet one of those criteria. However, in order to claim any caregiver deductions, they must meet both of these stipulations.

Restrictions on Sharing Deductions

Some people share the financial burden of caring for their loved ones with their siblings. Even so, only one sibling can claim the relative as a dependent.

To avoid conflict, people can determine which sibling provided the greater financial support. They can also take turns claiming the relative each year.

Non-Relative Household and Residency Requirements

Caregivers do not have to be related to the person for whom they care before claiming any caregiver deductions. However, they do have to meet certain household and residency requirements before adding this person as a dependent on their taxes.

By law, either the caregiver must live in the person for whom he or she provides care or the person must live in the caregiver's home for the entire tax year. A non-related person who lives out of the household cannot claim these deductions even if he or she does provide financial support for that individual. 

Limits on Claimable Deductions

Caregivers enjoy being able to claim a wide variety of expenses on their taxes. Some of the expenses that they can recoup include:

• Medical bills
• Long-term care costs
• Taxes on inherited IRAs
• Prescription costs
• Mileage
• Dental bills
• Interest on their relative's mortgage if they make the payment each month
• Home remodeling expenses if the work was done to make the home safer or more accessible.

All of these financial burdens can add up to significant amounts each year. People who act as caregivers to their relatives can have some or all of this money returned to them by taking advantage of these deductions.

With more people taking care of their aging or disabled relatives, it is understandable that many would like to recoup some or all of the money they spend doing so. They can utilize caregiver tax deductions if they or the person for whom they care can meet these outlined criteria. If they are unsure of how or when to claim caregiver deductions, people are encouraged to seek the help of a professional tax law service.