LENDING A HAND: Alzheimer’s Association spreads word about tax deductions, credits available for caregivers
LANSING — Alzheimer’s is one of the most expensive diseases in the country. The costs associated with Alzheimer’s can be staggering for families, with average out-of-pocket costs for health care and long-term care services not covered by Medicare, Medicaid and private insurance exceeding $10,000 annually.
With people living with Alzheimer’ for an average 4 to 8 years after a diagnosis — and many longer — disease-related costs can jeopardize a family’s financial security. Many families and caregivers must make enormous personal and financial sacrifices.
Knowing about available tax deductions and credits for caregivers could help ease stress.
“We’re hearing that, due to COVID-19 restrictions on group gatherings, normal tax prep clinics may not be as feasible this year,” said Jean Barnas, Alzheimer’s Association Michigan Chapter program services director. “We know that — while tax rules are complex and can change — caregivers likely pay for some care costs out of pocket and may be eligible for tax credits and deductions.”
With Michigan’s filing date extended to May 17, the Alzheimer’s Association offers these tips:
≤ Look at medical expenses. You may be eligible to deduct medical expenses — such as medical fees for diagnosis, prevention of disease, cures, hospital services, some long-term care and nursing services and insurance premium payments for accident and health insurance — from the taxes that you pay for yourself, your spouse and your dependents.
≤ Claim the Child and Dependent Care Credit on your federal income tax return if you paid someone to care for a child or a dependent so you could work or look for work, if you’re able. You may be able to reduce your tax.
≤ Make sure you have someone assigned with proper authority to handle your taxes if you should need them, like a Power of Attorney, and that they know where your important tax-related documents can be found.
≤ If you purchased long-term care insurance, you may be eligible for a credit or deduction on your taxes because qualified long-term care insurance premiums are considered a medical expense.
≤ Look into any additional tax deductions or tax credits available to caregivers in Michigan. Each state program differs by name and eligibility requirements.
For more information and eligibility requirements, visit alz.org/help-support/caregiving/financial-legal-planning/tax-deductions-credits, contact Michigan’s Department of Treasury and/or seek help from a tax professional for advice about your situation.