When you hire a caregiver through a service like Clara, you're not just ensuring quality care for your loved one—you may also be eligible for tax benefits. Let's explore the tax breaks available to those who employ caregivers.

Federal Tax Benefits

Child and Dependent Care Credit

This credit can provide substantial relief for those who pay for caregiving services:

• You can claim up to $3,000 in caregiving expenses for one qualifying dependent or $6,000 for two or more dependents.

• The credit allows you to claim between 20% and 35% of your qualified expenses associated with care.

• Eligible expenses include home care and adult day care programs that allow you to work or actively seek employment.

Learn more about the credit, and whether you’re eligible, on the IRS website.

Medical Expense Deductions

If you're covering medical expenses for your elderly dependent:

• You must itemize your deductions to claim medical expenses.

• You can only deduct the amount of expenses that exceeds 7.5% of your adjusted gross income (AGI).

• Eligible expenses can include a wide range of costs, from medical equipment to transportation for medical care.

California-Specific Tax Benefits

California Child and Dependent Care Expenses Credit

For California residents, this credit offers additional relief:

• You can claim up to $3,000 for one qualifying person or up to $6,000 for two or more qualifying persons.

• To be eligible, your federal adjusted gross income must be $100,000 or less.

• You must file a joint return if married.

Maximizing Your Tax Benefits

To make the most of these tax breaks:

1. Keep detailed records of all caregiving expenses throughout the year. Clara will handle this all for you.

2. Consult with a tax professional to ensure you're claiming all eligible deductions and credits.

3. Stay informed about changes in tax laws that may affect caregivers.

Conclusion

Understanding and utilizing available tax breaks can ease the financial strain of hiring a caregiver. While navigating tax laws can be complex, the potential savings make it worthwhile to explore these options.

If you're feeling overwhelmed by the process of managing care and navigating tax implications, Clara Home Care is here to help. Our platform simplifies the hiring and management of caregivers while ensuring compliance with tax laws.

To learn more about how Clara can support you in your caregiving journey and help you maximize your tax benefits, visit www.clarahomecare.com to contact our team of care consultants today.