Expenses for companionship or housekeeping services are not deductible as medical expenses. If the provider also provides medical care, such as delivering medications or taking blood pressure, you must allocate the percentage of care costs to medical expenses based on the amount of time involved. In order for your dependent care expenses to qualify as a medical expense, your mother must be certified by a physician to have a chronic, long-term illness and requires assistance with two or more activities of daily living (eating, dressing, toileting, continence, transferring) or that she has a cognitive impairment so that if she were left alone she would be a danger to herself or others. And, the care must be provided according to a written care plan that is created by a doctor or medical professional or qualified social worker, that is reviewed and updated annually.
Persons in nursing homes or memory care or other adult living facilities may be able to qualify because such facilities often have a person on staff who can prepare a written care plan.
If you have a written care plan for your mother, that describes the need for a full-time daycare provider, then you would be allowed to use the first $5000 toward the FSA and the remaining cost toward the medical expense deduction. You are correct that if you listed the entire $13,000 as a medical expense it would be double dipping. You can’t deduct something from your taxable income that was not part of your taxable income to begin with.
If you do not have a written care plan for your mother, then only the percentage of the care expense that is direct medical services would be deductible as a medical expense. You can still use the dependent care expense credit up to the limit of the FSA. If you don’t have a written care plan, you might want to investigate having your mothers physician or a social worker prepare a written care plan for you, so that you can deduct your 2020 care expenses on next year’s tax return.
