Tax season ushers the need to find ways to keep the amount you pay for taxes down. Many do this by sifting various expenses from the year to look for big expenses that can be tax deductible. However, it can be tricky to understand what certain expenses would count as a deductible.
It’s a question many who pay for home care services wonder when filing taxes. Home care services are a big expense. It would be great to use it as a tax-deductible.
According to partnersforhomecare.ca, let’s learn if home care expenses can be tax deductible, so you don’t get confused about it this tax season!
What Are Home Care Services?
Home care services aim to allow an aging, special needs, or person with a disability to live at home independently while still needing much-needed assistance. Those who work in home care services are normally professional caregivers like nurses, aides, and even a therapist since home care services cater to a person’s unique needs.
Here is what you can expect from home care:
- Post-acute care
- Observation & monitoring
- Manage & administer medication
- Wound care & pain management
- Occupational/ Physical therapy (i.e. to help strengthen the body for daily tasks)
- Speech/language therapy (i.e. speech issues after a stroke)
- Help with daily activities such as dressing and bathing
- Assistance with safely managing tasks around the house
These professional caregivers can provide either short-term or long-term care, depending on how much a person would need their assistance.
By getting a good idea about what home care services provide, you can see if these align with what expenses can be tax deductible.
What Expenses Are Tax Deductible?
Various expenses are tax deductible. Yet, based on what home care services provide, their expenses can count for a medical tax deduction.
Depending on where you live, some medical expenses are deductible, and others aren’t. For example, one person with an essential, daily prescription while another has a gym membership. The person with the perscription can get it deducted since it’s a valid medical claim, while the gym membership is more for promoting wellness, not anything medical in nature.
In which case, folks need to prove their medical expenses to be tax-deductible. How can they prove it? Mostly, people have proven their medical expenses through receipts, proof of prescriptions, and written certification from a doctor detailing the costs of treatments.
Can You Deduct Home Care Expenses?
Regarding home care expenses, they are certainly tax deductible! Home care services that are full-time care or specialized care eligible as tax deductible. However, certain conditions exist on what can or cannot be tax deductible based on where home care is received. Home care services in facilities can be tax deductible based on the fees for salaries and wages paid for attendant care or care or supervision.
These facilities include:
- Self-contained domestic establishments (such as your private home)
- Retirement homes/homes for seniors,
- Group homes in Canada
- Nursing homes
Meanwhile, those who home care services from their home can only claim for the period when they’re at home and need care or help. In which case, for it to qualify as a medical expense, the person would need to be eligible for disability tax credit and have written certification from a medical practitioner outlining how the services are required.
Home Care Expenses that Are Tax Deductible
As mentioned before, medical expenses are claimed as tax-deductible based on the salary and wages of professional caregivers. These are to equate to the services and tasks that they perform that would count for a medical expense.
Here is what can be claimed:
- Food preparation
- Housekeeping services for a resident’s personal living space
- Laundry services for a person’s items
- Health care (registered nurse, practical nurse, certified health care aide, personal support worker)
- Activities (social programmer)
- Transportation (driver)
- Security for a secured unit
Home Care Expenses that Are Not Tax Deductible
You can expect the following list below to be expenses you can’t count for tax deductibles:
- Cleaning supplies
- Other operating costs (such as maintenance of common areas and outside grounds)
- Salaries and wages paid to employees such as administrators, receptionists, groundskeepers, janitors (for common areas), and maintenance staff
Home care services can be quite pricey. Naturally, many would want to find a way to use the expenses of it to be used as a tax-deductible. Thankfully, home care services count mainly as medical deductibles – though that might vary depending on what constitutes it from where you live.
To Wrap it Up
Are home care expenses tax deductible? There is some debate about this topic, but it is generally accepted that expenses related to caring for a loved one at home are considered “ordinary and necessary” expenses. This means that most of the costs associated with these services (including wages, equipment, and supplies) can be deducted from your taxable income. However, there are some important caveats to keep in mind:
- The cost of caring for a loved one must be incurred while you are actually residing in the same household as the person requiring care. This does not include visits to the family physician or nurse practitioner.
- You cannot deduct payments made to someone else who provides care on your behalf (such as a nanny).
- You cannot deduct any losses sustained during the course of providing care services.
- In order to claim a deduction, you must provide documentation of your expenses. This can include receipts, letters from doctors, or other official documents.
If you are considering using home care services, it is important to understand the tax implications of doing so. By understanding how home care expenses are treated, you can make the most informed decision for your situation.