Adult day care services can be a lifeline for families caring for aging loved ones. These programs offer a safe and supportive environment for seniors during the day while giving caregivers much-needed time for work, errands, or rest. But one question often arises: Is adult day care tax deductible?
The answer is—it can be. However, eligibility depends on several factors including who pays for the care, the dependent’s medical condition, and how the care is used. Let’s break it down.
What Is Adult Day Care?
Adult day care provides structured programs for older adults who need supervision or assistance during the day. These services typically include:
- Social activities
- Assistance with daily living
- Meals and snacks
- Medication management
- Medical or therapeutic services (in some centers)
At Two Hearts Home for Seniors, we understand the value of these services in supporting both seniors and their caregivers. But beyond the emotional and physical benefits, there may also be financial advantages—especially when tax season rolls around.
When Is Adult Day Care Tax Deductible?
The IRS allows certain adult day care expenses to be claimed as tax deductions or credits, provided they meet specific criteria.
1. Medical Expense Deduction
Adult day care may qualify as a medical expense if the care is primarily for medical purposes. This typically applies if:
- The person receiving care is diagnosed with Alzheimer’s disease, dementia, or another chronic condition.
- A licensed healthcare provider has prescribed the care as medically necessary.
- The care is part of a qualified long-term care plan.
In these cases, the cost of adult day care may be deductible as a medical expense under Schedule A (Itemized Deductions). Note that the IRS only allows medical expense deductions that exceed 7.5% of your adjusted gross income (AGI).
2. Dependent Care Credit
Alternatively, if you’re paying for adult day care so that you can work or look for work, you may qualify for the Child and Dependent Care Credit.
To be eligible:
- The care recipient must be your dependent (usually a parent) who is physically or mentally incapable of self-care.
- The care must allow you (and your spouse, if filing jointly) to work or actively look for work.
- The care provider cannot be your spouse, another dependent, or the parent of the qualifying individual.
The credit can be worth 20% to 35% of up to $3,000 in care costs for one dependent or $6,000 for two or more dependents, depending on your income.
Required Documentation
To claim any deduction or credit, make sure you keep proper records, including:
- Medical diagnoses or statements from healthcare providers
- Proof of payment (invoices, receipts, canceled checks)
- Provider information (name, address, EIN or SSN)
It’s also important to consult with a tax professional to ensure you meet all the requirements and are taking full advantage of available deductions or credits.
What Adult Day Care Costs Are Not Deductible?
Some adult day care services are not considered deductible, such as:
- Costs for purely social or recreational programs
- Care that is not medically necessary
- Expenses that were reimbursed through insurance or other programs
Being aware of what qualifies and what doesn’t will help avoid complications at tax time
How Two Hearts Home for Seniors Can Help
At Two Hearts Home for Seniors, we believe in not only supporting our residents and their families emotionally and physically but also helping them navigate important life decisions—including financial considerations.
While we currently focus on assisted living services in Lowell and Crown Point, Indiana, we understand that many families consider a mix of caregiving solutions, including adult day care. If you’re exploring care options or looking to transition a loved one from day programs to 24-hour assisted living, our team is here to guide you.
Final Thoughts
Yes, adult day care can be tax deductible—but only under certain conditions. Whether through the medical expense deduction or the dependent care credit, families may be able to offset some of the financial burden of caregiving.
Every family’s situation is unique, so don’t hesitate to speak with a tax advisor and your care provider to ensure you’re maximizing the benefits available to you.
Need help understanding care options for your loved one?
Contact Two Hearts Home for Seniors today to schedule a consultation. We’re here to support families with compassionate care, trusted guidance, and peace of mind in Indiana.