"Child or Dependent Care" vs "Medical Expenses"

[StruggleWithACA]

The questions are for 2019 income tax return related to elderly long-term care.

My father was paralyzed. He didn't have any income or asset, and was ineligible for any benefit, such as SS, Medicare, or Medicaid. I paid out of my pocket for everything that he needed, including medical and long-term care, for the entire year 2019.

He is my dependent in my 2019 income tax return.

There is a question in TurboTax, "Did you pay for child or dependent care in 2019?" I answered "Yes", as I paid for my father (my dependent) to stay at a group home for part of the year. 

Then another question, "Pick a dependent and a provider, and tell us how much you paid". I picked my father's name and the provider, and entered $10,000+ that I paid.

As a result, I've got $600 Child and Dependent Care Credit.

Questions:

1) May I also enter this expense (in the amount of $10,000+) in the "Medical Expenses" section?

2) It asks if the group home (where my father stayed) is an organization or a person. 

         The homeowner registered her house as a facility where she hires several caregivers to care for 5 elderly residents. Is this considered an organization or a person?

3) It asks if the group home is a tax-exempt organization.

         I assume that the group home pays taxes. But I don't know for sure. What is the implication of this question?

[macuser_22]

I suggest that you read the rules in IRS Pub 503 to see if you meet the qualifications and you paid MORE than half of his total support for the entire year to meet the dependent test (see support test below).  While SS and disability payments do not count toward the gross incime test, they do count toward support that you do not provide.

https://www.irs.gov/pub/irs-pdf/p503.pdf

Who Is a Qualifying Person?
Your child and dependent care expenses must be for the care of one or more qualifying persons.
A qualifying person is:
1.
Your qualifying child who is your dependent and who was under age 13 when the care was provided (but see Child of divorced or separated parents or parents living apart, later);
2.
Your spouse who wasn't physically or mentally able to care for himself or herself and lived with you for more than half the year; or
3.
A person who wasn't physically or mentally able to care for himself or herself, lived with you for more than half the year, and either:
a.
Was your dependent, or
b.
Would have been your dependent except that:
i.
He or she received gross income of $4,200 or more,
ii.
He or she filed a joint return, or
iii.
You, or your spouse if filing jointly, could be claimed as a dependent on someone else's 2019 return.

---Tests to be a Qualifying Relative (& Unrelated Persons)---
(Must meet ALL of these tests to be a dependent)

1. The person cannot be your qualifying child or the qualifying child of any other taxpayer.

2. The person either must be related to you, or must live with you all year (all 365 days - There are exceptions for temporary absences such as school, illness, business, vacation, military service) as a member of your household.

3. The person's gross income for the year must be less than $4,200 (tax-exempt income, such as certain social security benefits, is not included in gross income)

4. You must provide more than half of the person's total support** for the year.

5. The person is not filing a joint return.

In any case, the person must be a U.S. citizen, U.S. resident alien, U.S. national, or a resident of Canada or Mexico

The above is simplified; see IRS Publication 501 for full information.
https://www.irs.gov/publications/p501#en_US_2018_publink1000220939

** Worksheet for determining support
https://www.irs.gov/publications/p501#en_US_2019_publink1000226268

[NCperson]

1) since your parent is your dependent, then yes, the medical expenses can list claimed as itemized deductions.

please read this article;

https://ttlc.intuit.com/community/credits-and-deductions/help/what-is-the-child-and-dependent-care-c...

there are other requirements for taking the dependent care credit - for example, were you and your spouse working? if no, then you are not eligible for the credit.  Did he live with you for at least 6 months of the year - if he was at a group home for at least 6 months, doesn't appear you are eligible for this credit. 

[macuser_22]

---

@NCperson wrote:

1) since your parent is your dependent, then yes, the medical expenses can list claimed as itemized deductions.

please read this article;

https://ttlc.intuit.com/community/credits-and-deductions/help/what-is-the-child-and-dependent-care-c...

there are other requirements for taking the dependent care credit - for example, were you and your spouse working? if no, then you are not eligible for the credit.  Did he live with you for at least 6 months of the year - if he was at a group home for at least 6 months, doesn't appear you are eligible for this credit. 

---

I agree that long term care can be a deductible medical expense, but keep in mind that it is an itemized deduction with a 7.5% of AGI threshold.      For example if the AGI is $80,000 then only that amount more than (80000 * .075) = $6,000 or $4,000 of the $10,000 would be deductible.  Then only if all itemized deductions exceed the standard deduction (which for MFJ is $24,000) so unless you can itemize anyway, it might not make any tax difference.

And yes, dependent care is "work related".   Unless both spouses had earned income (if married) AND the care was necessary so that both spouses could work, AND the dependent lived in your home more than half the year, then you would not qualify for dependent care credit.