Custodial Care Tax Deduction: AGI Floor and Qualifying Expenses

You can claim a custodial care tax deduction as a medical expense on Schedule A, but only if the person receiving care has been certified as “chronically ill” by a licensed health care practitioner, and only for the portion of your total medical costs that exceeds 7.5% of your adjusted gross income. The deduction also requires you to itemize, which for 2026 means your itemized deductions need to clear a standard deduction of $16,100 for single filers or $32,200 for married couples filing jointly.¹ So two things have to line up: the person qualifies, and the numbers work.

Who Counts as Chronically Ill

Custodial care by itself is a personal expense. The tax code only lets you deduct it when the person receiving care meets a specific definition of chronic illness, and that definition is where most families get tripped up.

A licensed health care practitioner must certify, within the previous 12 months, that the person meets one of two conditions. The first is being unable to perform at least two of six activities of daily living without substantial help, for a period of at least 90 days, due to a loss of functional capacity. The six activities are eating, toileting, transferring (moving between a bed and a chair, for instance), bathing, dressing, and continence. The second qualifying condition is severe cognitive impairment requiring substantial supervision to protect the person from threats to health and safety. That second path is what covers Alzheimer’s and advanced dementia, even when the person can still physically dress and feed themselves.²

The certification has to be renewed each year. Care costs paid during any period without a current certification lose their deductibility, so put the paperwork in place before you start paying.

Which Custodial Care Costs Qualify

Once the certification is in place, the care must be provided under a plan of care prescribed by a licensed health care practitioner. The plan does not need to be elaborate, but it does need to exist.²

In-Home Caregivers

Wages paid to a caregiver who provides nursing-type services in the home are deductible, even if the caregiver is not a licensed nurse. What matters is the work: help with medication, bathing, dressing, and similar personal care. If the same person also cooks, cleans, or does laundry, only the portion of pay attributable to personal care qualifies. You need to allocate their time between deductible care tasks and non-deductible household work.³

Paying a family member is allowed. A daughter who handles a chronically ill parent’s daily bathing and medication can be paid for that work, and the parent (or whoever claims the deduction) can deduct the medical care portion. The paid family member cannot also be claimed as a dependent on the same return. Budget for employer-side payroll taxes as well; the employment tax payments themselves count as part of the deductible medical expense.³

Nursing Homes and Assisted Living

When someone lives in a nursing home and the principal reason for being there is the availability of medical care, the full cost of the stay is deductible, including meals and lodging. That “principal reason” test is the whole ballgame. If the person is in the facility mainly for convenience or companionship, without a qualifying medical need driving the placement, only the portion of the bill attributable to actual medical or custodial care counts.⁴

Assisted living bills usually bundle personal care, housing, meals, and activities into a single monthly fee. Only the portion covering actual medical or qualified custodial care is deductible. Ask the facility for an itemized breakdown separating care from room, board, and recreation. Some provide one annually for tax purposes; others need a specific request.

Medical Equipment and Supplies

Equipment used during custodial care (hospital beds, wheelchairs, oxygen systems, incontinence supplies) is deductible when prescribed or necessary for the person’s condition. Add these costs to your other medical expenses on Schedule A.

Whose Care You Can Deduct

You can deduct qualifying custodial care expenses you pay for yourself, your spouse, or your dependent. Adult children paying for a parent’s care run into the dependent rules most often, and there’s one rule in particular that changes the math for many families.

The Gross Income Test Is Waived

Normally, a qualifying relative has to earn less than a set threshold to be claimed as a dependent. For 2025 that threshold was $5,200. For the medical expense deduction, though, the gross income test is waived entirely. The statute applies the deduction to dependents “determined without regard to” that test.⁵

A parent whose Social Security, pension, or investment income puts them far above the dependent threshold can still generate a medical expense deduction for the adult child paying their care bills, as long as the other dependent tests are met: you provide more than half of the parent’s total support, and the parent is a qualifying relative (parent, stepparent, or parent-in-law).⁶

When Siblings Share the Cost

If no single sibling provides more than half of a parent’s support, a multiple support agreement can preserve the deduction. Anyone who contributed more than 10% of the parent’s support can be designated as the person who claims the parent, provided every other sibling who contributed more than 10% signs Form 2120 agreeing not to claim the parent that year.⁶

Only the amounts that the designated sibling personally paid are deductible on their return, not the pooled total. Families that rotate which sibling claims the parent each year can sometimes maximize the overall benefit.

Separately, if you’re writing large checks for a relative’s care, payments for medical care made directly to the care provider are excluded from gift tax with no dollar limit. The rule is about who receives the check: pay the nursing home directly and it’s gift-tax-free; hand the money to your parent and let them pay, and it counts against your annual gift exclusion.⁷

The 7.5% AGI Floor and the Itemizing Hurdle

Even with everything else lined up, two thresholds decide whether the deduction actually saves you money.

First, only medical expenses above 7.5% of your AGI count. With $80,000 of AGI, the first $6,000 of medical costs produces no deduction; the benefit starts at dollar 6,001.⁴

Second, the deduction only helps if you itemize. For 2026, the standard deduction is $16,100 for single filers and $32,200 for married couples filing jointly.¹ Your total itemized deductions (the medical amount above 7.5% of AGI, plus state and local taxes, mortgage interest, and charitable gifts) have to exceed the standard deduction that applies to you.

Taxpayers age 65 or older can claim an additional standard deduction of $6,000 per person for 2026, or $12,000 if both spouses on a joint return qualify. The higher baseline makes itemizing harder for older filers, who are the ones most likely to have significant care expenses. Run the numbers both ways before you commit.⁸

A Worked Example

Say your AGI is $100,000 and you paid $25,000 in custodial care for a chronically ill parent, plus $4,000 in other medical costs. Total medical expenses: $29,000. The 7.5% floor is $7,500, so $21,500 goes into your itemized deductions. Add state and local taxes (capped at $10,000) and any other itemized amounts. If the total clears $16,100 (single) or $32,200 (joint), itemizing beats the standard deduction.

What Reduces Your Deduction

Any care expenses reimbursed by insurance come off the top before you calculate the deduction. The statute allows only expenses “not compensated for by insurance or otherwise.”⁵ If long-term care insurance covers $15,000 of a $25,000 care bill, your starting deductible amount is $10,000.

The same no-double-dipping rule applies to Health Savings Accounts and Flexible Spending Accounts. Expenses paid or reimbursed with HSA or FSA funds cannot also appear on Schedule A.⁹

Long-Term Care Insurance Premiums

Premiums on a qualified long-term care insurance policy count as medical expenses too, subject to age-based annual limits. For 2026:

Age 40 or under: $500
Age 41 to 50: $930
Age 51 to 60: $1,860
Age 61 to 70: $4,960
Over age 70: $6,200

The limits apply per person, so a married couple each paying premiums can count their respective amounts. The policy has to meet the federal definition of a “qualified” long-term care insurance contract. Most hybrid life and long-term care combination products don’t qualify. Check your policy documents for “tax-qualified,” or ask your insurer.²

When the Dependent Care Credit Fits Better

If you pay for custodial care so you can work or look for work, the Child and Dependent Care Credit may be available on top of or instead of the medical expense deduction. The credit applies when you pay someone to care for a physically or mentally incapacitated adult who lives with you for more than half the year and qualifies as your dependent (with the same gross income test waiver).¹⁰

The credit is calculated on up to $3,000 of work-related care expenses for one qualifying person, or $6,000 for two or more, at a rate of 20% to 35% depending on income. It reduces your tax bill directly and doesn’t require itemizing. You can’t claim the same dollar for both the credit and the medical expense deduction, but if your total care costs exceed the $3,000 or $6,000 cap, the excess can still go on Schedule A.

Records to Keep and How to File

Documentation is what makes the deduction stick if the IRS asks questions. You need three things: the medical certification, the care expense records, and proof of the dependent relationship where relevant.

The certification of chronic illness from a licensed health care practitioner is the foundation. Get it in writing, keep it with your tax records, and renew it every year. It should state either that the person cannot perform at least two activities of daily living, or that they require substantial supervision due to cognitive impairment.

For expenses, keep itemized invoices that separate qualifying personal care from non-deductible charges like recreation, housekeeping, or meals outside a qualifying nursing home stay. Match each invoice to a bank statement or canceled check. If you pay a family member, document their hours and the specific tasks performed.

Report the deduction on Schedule A (Form 1040) as part of your medical and dental expenses.¹¹ You don’t attach the certification or receipts to your return, but the IRS can request them. Keep everything for at least three years after filing.¹²

1
Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026
2
Office of the Law Revision Counsel. 26 USC 7702B – Treatment of Qualified Long-Term Care Insurance
3
Internal Revenue Service. IRS Publication 502 – Medical and Dental Expenses
4
Internal Revenue Service. Topic No. 502, Medical and Dental Expenses
5
Office of the Law Revision Counsel. 26 USC 213 – Medical, Dental, Etc., Expenses
6
Office of the Law Revision Counsel. 26 USC 152 – Dependent Defined
7
eCFR. 26 CFR 25.2503-6 – Exclusion for Certain Qualified Transfer for Tuition or Medical Expenses
8
Internal Revenue Service. 2026 Filing Season Updates and Resources for Seniors
9
Internal Revenue Service. Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans
10
Internal Revenue Service. Publication 503, Child and Dependent Care Expenses
11
Internal Revenue Service. Instructions for Schedule A (Form 1040)
12
Internal Revenue Service. How Long Should I Keep Records