5 Caregiver Tax Credits + Benefits to Help You Save

We love our family, but being an in-home caregiver can be expensive. Fortunately, the IRS has some tax benefits available if you take care of and financially support a family member.

If you’re new to caretaking for your parents or have recently welcomed a child, you might not be familiar with the tax benefits that are available to you.Read on to learn more about how certain tax credits, like the Child and Dependent Care Credit, directly reduce your tax bill, while other tax benefits, like deductions and filing status, can lower the income you are taxed on to help you save.

Key takeaways

• As a caregiver, you may be able to claim credits related to childcare, medical expenses, and even the costs of an adoption.
• A dependent doesn’t have to be your child or spouse; they can be someone who relies on you who isn’t able to mentally or physically care for themselves.
• The Child Tax Credit was increased to $2,200 per qualifying child by the OBBBA.
• As part of the OBBBA, the dependent exemption was permanently eliminated.

What types of advantages do caretakers have when filing taxes?

Caretakers can take advantage of several types of benefits when filing taxes. First and foremost are the specific tax credits that you can take to directly reduce your tax bill dollar for dollar. In addition, you may also be able to take a higher standard deduction as someone with dependents.

Let’s dive into each of these tax benefits for caretakers:

Child Tax Credit

If you have a dependent child, you’ll be happy to hear that the One Big Beautiful Bill Act (OBBBA) increased the Child Tax Credit to $2,200 per dependent child under the age of 17 (up from $2,000). More families can get the credit since the income limit is $200,000 for single filers and $400,000 for those married filing jointly.

Besides the tax credit you can receive for dependent children under 17, you may also qualify for a tax credit for your other dependents. This is beneficial because, in an increasing number of cases, elderly parents and other family members can also be classified as qualifying dependents.

The Credit for Other Dependents is a credit of up to $500 if you are supporting someone other than your child under 17.

The IRS permits you to claim the Credit for Other Dependents if they meet these criteria:

• They must be a U.S. citizen, a U.S. national, or a U.S. resident alien with a valid identification number, which includes a Social Security number, Individual Taxpayer Identification Number, or Adoption Taxpayer Identification Number.
• They have a gross income that is not greater than $5,200 for the 2025 tax year.
• You provided more than half of their financial support. This includes expenses such as clothing, medical care, housing, food, and transportation.
• If they are a relative, they do not have to live with you, but non-relatives have to live with you for the entire year.
• They are not filing a joint return with their spouse. 
• Finally, they cannot be claimed as a dependent on another tax return.

Child and Dependent Care Credit

The Child and Dependent Care Credit is a credit used to pay for expenses for the care of a child or dependent that enables you to  work, look for work, or attend school full-time. This credit is most often used by parents that pay for childcare, but it applies to other dependents as well.

The maximum amount of care expenses that qualify for the credit are up to $3,000 for one qualifying child and $6,000 for two or more children. The maximum credit is $1,050 (35% of $3,000) for one child under the age of 13 (no age limit if disabled) and $2,100 (35% of $6,000) for two or more children under the age of 13 (no age limit if disabled).

For Dependents other than your children:

• If the dependent is your spouse, they must be physically or mentally incapable of self-care and have lived with you for more than half of the year.
• If the dependent is not your spouse, they must be an individual who was physically or mentally incapable of self-care, lived with you for more than half of the year, and either:
  • (a) was your dependent; or 
  • (b) could have been your dependent but was disqualified because he or she received gross income of $5,200 or more in 2025, filed a joint tax return, or you (or your spouse, if filing jointly) could have been claimed as a dependent on another taxpayer’s  2025 return.

Adoption Tax Credit

If you’ve adopted a child, you may be eligible for the Adoption Tax Credit to help offset the costs involved. Your expenses qualify as long as they apply to the adoption of a child under 18 years old or someone of any age who is physically or mentally unable to take care of themselves.

These expenses may include:

• Adoption fees
• Travel expenses including meals and lodging
• Attorney fees
• Court costs

If some or all of these costs were already covered, say by your employer or a government program, you can’t claim them as part of this credit.

For tax year 2025, the Adoption Tax Credit is worth a maximum of $17,280 per eligible child. New for tax year 2025, up to $5,000 of the credit is refundable. The remainder of the credit can be carried forward for up to five tax years if the amount you qualify for is more than your tax bill.

Head of Household Status

If your filing status is normally single, you may be able to file as Head of Household if you have a dependent. This gives you additional tax savings because the standard deduction for the Head of Household filing status is more than the standard deduction if you file as single.

For example, the standard deduction in  2025 for single filing status is $15,750, but it jumps to $23,625 for heads of household.

Unreimbursed Medical Expenses

If you have any unreimbursed medical expenses for a dependent, you may be able to deduct them on your tax return. The deduction follows the same rules as your personal unreimbursed medical expenses: if you have qualified medical expenses that exceed 7.5% of your adjusted gross income and you itemize your deductions, you can deduct them.

Was the dependent exemption reinstated?

The Tax Cuts and Jobs Act (TCJA) eliminated the dependent exemption for tax years 2018 through 2025. While the dependent exemption was expected to return in 2026, allowing taxpayers to once again reduce their taxable income per dependent, the OBBBA permanently eliminated it as of July 4, 2025.

An informed tax strategy helps you save

Understanding where you stand as a taxpayer can help you maximize your savings and minimize your tax bill, keeping more money in your pocket to care for those who depend on you.

No matter what moves you made last year, TurboTax will make them count on your taxes. Whether you want to do your taxes yourself or have a TurboTax expert file for you, we’ll make sure you get every dollar you deserve and your biggest possible refund – guaranteed.