My 85yo wife is home bound, diagnosed with dementia, CKD3B, TypeII diabetes and diabetic neuropathy below both knees. Weve hired "HomeCareAgencyX"at $37/hr. Agency X performs the services described by the IRS as a Statutory Companion-Sitter. What, if any, of the dollars paid AgencyX for their Companion -Sitter are deductible?
Lighten up...you'll feel better.
I’m guessing you’d base it on Cognitive impairment requiring protective supervision.
https://www.irs.gov/pub/irs-pdf/p502.pdf
It is probably deductible, within the limitations of medical expenses as part of using itemized deductions.
You definitely need to consult a tax professional about deductibility of expenses for a companion-sitter. If the companion-sitter is hired because your wife cannot safely be alone while you are working, there is the "child and dependent care credit" which can be up to $3,000 off your taxes. https://www.irs.gov/taxtopics/tc602 That credit is only available if you are working, and the expenses cannot be counted in your itemized deductions also (i.e., can only count the expenses once).
To claim companion-sitter expenditures as a medical deduction you would have to itemize; you can only count medical expenses in excess of 7.5% of your income; and you need to be able to separate out what would be considered "medical" services from non-medical services such as doing dishes or laundry. Services such as help with bathing, dressing, or mobility are considered medical from an IRS perspective. Quoting from the IRS manual, "You can include in medical expenses wages and other amounts you pay for nursing services. The services need not be performed by a nurse as long as the services are of a kind generally performed by a nurse. This includes services connected with caring for the patient's condition, such as giving medication or changing dressings, as well as bathing and grooming the patient. These services can be provided in your home or another care facility.
Generally, only the amount spent for nursing services is a medical expense. If the attendant also provides personal and household services, amounts paid to the attendant must be divided between the time spent performing household and personal services and the time spent for nursing services." For medical expense deductions, see:
https://www.irs.gov/publications/p502#en_US_2022_publink1000178989
Lighten up...you'll feel better.
Lighten up...you'll feel better.